Based on the optimal contract theory, we explore the impact of management equity incentives on the enterprise performance of the manufacturing industry utilizing Shanghai and Shenzhen A-share listed companies in China's manufacturing industry from 2014 to 2021 as the study object. The findings demonstrate that management equity incentives can significantly improve enterprise performance in the manufacturing industry, with the effect being stronger in traditional than in high-tech manufacturing. The results of the pathway study show that: from the perspective of "open source", management equity incentives may help a company's operating income increase; from the perspective of "cost reduction", equity incentives can lessen the damage to shareholders' interests and enterprise value caused by management's moral hazard behavior, and reduce agency costs; both of which can achieve the purpose of enhancing enterprise performance.

Meiqing Chen, Liezhi Shen, Yunxi Ling. An empirical study of the relationship between management equity incentives and enterprise performance in the manufacturing industry. Academic Journal of Business & Management (2023) Vol. 5, Issue 23: 181-191. https://doi.org/10.25236/AJBM.2023.052326.

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