The alleviating effect of margin trading on the stickiness of executive compensation

The implementation of margin trading provides policy effect researches with rich natural experimental environment. Taking the margin trading underlying securities of Shanghai and Shenzhen A shares from 2008 to 2020 as the research sample, this paper puts under empirical examination the alleviating effect of margin trading on executive compensation stickiness of listed companies by use of the Multi-phase Difference-in-Differences Model(DID Model). The results show that margin trading significantly enhances the effectiveness of executive compensation contract, and eases the stickiness of executive compensation; in comparison, margin trading exerts significantly greater alleviating effect on executive compensation stickiness in state-owned enterprises than in private enterprises. The action mechanism research reveals that margin trading alleviates executive compensation stickiness via the limiting of the power of the management and the reduction of information asymmetry.