Does Enterprise Annuity Alleviate the Principal-agent Problem?

The pressure on social pensions can be reduced by actively encouraging businesses to join corporate pension plans. This study uses data from A-share listed firms from 2012 to 2022 to empirically evaluate the relationship between corporate pension and corporate agency problem and its mechanism of action from the perspectives of financial performance and innovation performance. The study's findings demonstrate that the corporation can reduce the agency problem by implementing a corporate annuity system. Additional investigation into the fundamental connection between agency problems and corporate annuities reveals that, when viewed through the lens of financial success, financial performance can amplify the corporate annuities' deterrent effect on agency problems. The study indicates that companies can enhance their innovation performance by participating in annuities, which can have the effect of reducing agency difficulties. The data's heterogeneity analysis shows that, in the eastern and central regions, the mediating role of innovation performance is highly important whereas, in the western region, the moderating effect of financial performance on the agency problem is not always significant. After dividing the sample based on the type of state-owned business, it was discovered that the findings from these entities mostly agreed with the paper's overall conclusions.