Can executive equity incentives enhance corporate debt-paying ability?—An analysis based on the moderating mechanism of patient capital

Fang Fang and Dan Chen

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: Based on data from Chinese A-share listed companies in Shanghai and Shenzhen from 2011 to 2023, this study constructs a panel model to analyze the specific impact of executive equity incentives on corporate debt-paying capacity, and innovatively incorporates patient capital as a moderating variable into the analytical framework. Empirical results indicate that executive equity incentives are significantly positively correlated with corporate debt-paying capacity; patient capital plays a substantial moderating role in the transmission path by which executive equity incentives affect debt-paying capacity; the effect of executive equity incentives on corporate debt-paying capacity is more pronounced in private enterprises (PEs) than in state-owned enterprises (SOEs); and the enhancement of debt-paying capacity through executive equity incentives is significantly stronger in high-tech enterprises compared to non-high-tech enterprises.

Keywords: Equity incentives; Debt-paying capacity; Patient capital (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025005106

DOI: 10.1016/j.iref.2025.104347

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