Abstract: Taking the A-share listed companies from 1996 to 2016 as the research object, this paper conducts an empirical analysis of the relationship between accounting conservatism and investment efficiency, and the adjustment effect of executive incentives on accounting conservatism and investment efficiency. The findings show that accounting conservatism can inhibit excessive investment, alleviate under-investment and improve investment efficiency, and that executive monetary compensation incentives can enhance the inhibition effect of accounting conservatism on over-investment, while executive equity incentives will weaken the inhibition effect of accounting conservatism on over-investment. Further research finds that the incentives of executives’ monetary compensation in private enterprises will enhance the restraining effect of accounting conservatism on over-investment, while the executive equity incentives of state-owned enterprises will weaken the inhibition of accounting conservatism on over-investment. In companies with lower levels of accounting conservatism, both the executive monetary compensation incentives and executive equity incentives can significantly inhibit over-investment.

Key words: executive incentives; accounting conservatism; investment efficiency