Management Incentives and Corporate Financialization: A Literature Review

Abstract

In recent years, the real economy has slowed down, while the financial industry and the real estate industry have entered a stage of rapid development. More and more non-financial enterprises are involved in finance, increase financial asset allocation, and expand investment in the financial industry due to sustainable development needs and super-profits. The development of financial activities has affected the main business development of the entity enterprises to a large extent, and even brought financial hidden dangers and risks. As an effective means of enterprise internal governance, management incentive is gradually practiced in the process of entity enterprise financialization. By combing relevant literature, this paper finds that: there are existing literatures on the relationship between management incentive and financialization of entity enterprises, but different management incentive ways have different impacts on enterprise financialization. At present, the corporate financialization governance is one of the most important and worthy of discussion in the theoretical and practical circles. Whether management incentives affect the corporate financialization and whether they can effectively manage the possible risks and challenges of the corporate financialization is worth discussing.