Abstract: The paper explains the motivation and economic consequences of industry change behavior based on “loss aversion” hypothesis of prospect theory and manager′s self-interest motivation. Research shows short-term performance of industry changes is obvious, but the long-term performance is not obvious, indicating a certain degree of success motivation exists at present in industry change of our country, and this not only is related to the scientific nature of enterprise management decisions, but also is related to the nature of the company and management incentives: short-term performance is better after the industry change, but R&D investment and long-term performance effect is not obvious; compared to non-state-owned enterprise, short-term performance effect of state-owned enterprise changes is more obvious, and its long-term performance is not obvious. Short-term performance effect of non-central control state-owned enterprise is more obvious, and its long-term performance is not obvious; compared to higher degree of market area, short-term performance of lower market area is more obvious, and long-term performance effect is not obvious. Further analysis finds: short-term performance effect of industry change is more obvious before the Share Merger Reform; industry change improves short-term performance in lower-paid manager group, but long-term performance which means long value after the industry change is better in higher-paid manager group.

Key words: industry change, performance division, prospect theory, manager′s self-interest, quick success