Equity incentive, separation of two rights and corporate performance: research on corporate governance based on two types of agency costs

This paper discusses the impact of equity incentive and the separation of two rights on corporate performance and the intermediary role of two kinds of agency costs by using the revised stepwise method taking A-share listed companies as the research object and using the Jones model to remove the impact of earnings management on corporate performance. The classification of industry and nature is introduced to further judge the heterogeneity of the conclusions. The results show that equity incentive can significantly reduce the first kind of agency cost and improve corporate performance, but the intermediary effect of the first kind of agency cost between equity incentive and corporate performance is not significant. Limiting the degree of separation of the two rights can significantly reduce the second kind of agency cost to improve corporate performance, and the second kind of agency cost has a partial intermediary effect between the degree of separation of the two rights and corporate performance. The results of different industries are heterogeneous and need to be treated differently. It is further found that non-state-owned enterprises can improve corporate performance through governance measures, but state-owned enterprises have not achieved a significant governance effect. This paper clarifies the black box between corporate governance and corporate performance from the effects of the two types of agency costs and effectively supplements the existing research system, which also provides a reference for market regulators to formulate policies.