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To satisfy the demand of initial investor for above-average capital return and the expectation of entrepreneurial management to establish their own business, this paper…
To satisfy the demand of initial investor for above-average capital return and the expectation of entrepreneurial management to establish their own business, this paper aims to explore a dynamic equity allocation model in which the shareholding ratio of the technology-based entrepreneurial firm changes with its growth and profit. Based on the dynamic equity allocation model, the authors design a financing structure which not only ensures timely and adequately obtaining the fund but also avoids equity dilution and safeguards the integrity of equity.
The paper selects high-tech companies listed in China as the sample for empirical research to identify the role of stock incentive and uses model deduction to find the equitable quantized benchmark for entrepreneurial management equity allocation. The study uses capital exclusivity as an entry point to perform theoretical analysis and demonstrates how the equity allocation of a technology-based entrepreneurial firm changes dynamically as the presentation speed of entrepreneurial management’s human capital exclusivity accelerates. The paper then constructs a conceptual model to design the financing structure of the technology-based entrepreneurial firm.
The study finds that stock incentive upwardly regulates debt financing and downwardly regulates equity financing. Based on characteristics of technology-based entrepreneurial firms, the paper suggests that the immediate surplus capital increment can signify the increasing presentation speed of human capital exclusivity, and it is proposed as an equitable quantized benchmark for equity allocation to entrepreneurial management. Based on the dynamic equity allocation model, the paper designs an internal equity and external debt financing structure.
The conclusions enrich the theoretical foundation for entrepreneurial management to participate in residual claim and provide practical guidance for equity allocation and financing structure design in the context of mass entrepreneurship and innovation. The paper also sets up a conceptual framework for solving two major issues of the technology-based entrepreneurial firm: timely acquisition of external funding and lasting maintenance of entrepreneurial management stability.
The main purpose of this paper is to analyze the effect of fairness psychology on the motivation and behavior that drives managerial entrenchment. The paper also provides…
The main purpose of this paper is to analyze the effect of fairness psychology on the motivation and behavior that drives managerial entrenchment. The paper also provides a theoretical basis to set up an effective incentive and restraining mechanism for corporations.
This paper conducts an experiment to investigate the effect of fairness preference on managerial entrenchment in enterprises.
The results of the experiment show that managers are very concerned about fair payoffs, i.e. the comparison of the principals’ earnings with managers’ market average levels of pay. The worse managers’ fairness preference becomes, the greater are the degrees of managerial entrenchment exhibited. In addition, a large payoff gap between managers and principals produces a higher sensitivity in high-ability managers, while a large payoff gap between managers and managers elsewhere in a market leads to a higher sensitivity in low-ability managers.
This paper provides new insights into incentives and constraints affecting the behaviors of managers at the corporate board level. Maintaining equity between managers’ payoffs, principals’ earnings and managers’ market average pay levels can restrain both the entrenchment behavior of managers caused by unfair psychology and also the increasing costs of staff switching jobs, thus producing greater profits for companies.
The purpose of this paper is to assess the relationship between some management features (management capability, management entrenchment, agency costs and overconfidence…
The purpose of this paper is to assess the relationship between some management features (management capability, management entrenchment, agency costs and overconfidence) and the innovation of companies listed on the Tehran Stock Exchange.
The study carried out during 2009–2015. A total of 125 companies were selected from eight industries as the sample of study using the method of systematic elimination. A descriptive-correlational design was used in this study and panel data regression models were employed for developing the relationship between research variables.
The obtained results indicated that managerial ability could foster innovation, while managerial entrenchment could stifle innovation and agency costs and overconfidence have no effect on innovation.
The current study is almost the first project which focuses on the management characteristics and firm innovation in developing countries.