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Shareholding structure, private benefit of control and incentive intensity: from the perspective of enterprise strategic behaviour

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  • Kai Zhao
  • Hua-Hua Huang
  • Wan-Shu Wu

Abstract

This paper studies theoretically and empirically the relationship among shareholding structure, the private benefit of control and incentive intensity. By integrating the principal–agent theory and the market competition theory into the three-stage dynamic game model, we built the dual principal–agent relationship including both ‘shareholder-manager’ and ‘controlling shareholders-small and medium shareholders’. Empirically, the panel data of 1971 listed enterprises in China from the year 2007 to 2014 are analysed in order to justify the theoretical results by using two-way fixed effect model, dynamic panel model, and threshold regression model. It is shown that for enterprise managers, the higher their ability level and risk aversion, the stronger their incentive intensity will be. However, for shareholders, the private benefit of control and the incentive intensity show a non-linear relationship with the change of ownership concentration.

Suggested Citation

  • Kai Zhao & Hua-Hua Huang & Wan-Shu Wu, 2021. "Shareholding structure, private benefit of control and incentive intensity: from the perspective of enterprise strategic behaviour," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 34(1), pages 856-879, January.
    • Handle: RePEc:taf:reroxx:v:34:y:2021:i:1:p:856-879
    DOI: 10.1080/1331677X.2020.1805345
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    Citations

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    Cited by:

    1. Henrique Faverzani Drago & Gilnei Luiz Moura & Luciana Santos Costa Vieira Silva & Claudimar Pereira Veiga & Fabíola Kaczam & Luciana Peixoto Santa Rita & Wesley Vieira Silva, 2023. "Reviewing the relationship between organizational performance, dynamic capabilities and strategic behavior," SN Business & Economics, Springer, vol. 3(1), pages 1-22, January.
    2. Kai Zhao & Wanshu Wu & Junmei Ye, 2023. "The impact of “Mass Entrepreneurship and Innovation” policy on SMEs’ innovation: Using quasi‐natural experiments," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 348-365, April.

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