Research On Investment In Technical Innovation And Its Incentive Mechanism Of Group Corporation

In modern economy, group corporations dominate the market, and pursue integrated interests. However, many companies could not fully regale themselves with benefit of innovations because of benefit segmentation, spillage and spread effect of technical innovation, and as a result of this consideration, would not like to put into full-scale investment in technical innovative programs. This results in poor efficiency in innovation activity.This study, taking into consideration of spillover effect, spread effect and lagging effect of technical innovation, analyzes evaluation theories and indicating system of group corporations, probes into the reasons of insufficient investment for innovation in a natural gas enterprise, with a research for ways of improvement and a reasonable distribution system under the condition of spillover of innovation interests, and redesigns an incentive mechanism based on interest cycle. The study also provides positive evidences, which are sampled from a realistic group company, to prove each theoretic conclusion in every section.Firstly, the author analyzed the defining of concepts such as technology and technical spillover, studied papers and documentations with regarding of administration of technical innovation, group innovation, and its evaluation, and found some suggestive viewpoints concerning technical innovation spillover. On the other hand, the author tried to find a way that will possibly lead the oil and natural gas enterprises to increase their investment into technical innovation, on the basis of great efforts in study of innovative fruits of the oil and natural gas industry.Secondly, One of the key management issues for a decentralized group company is to prevent insufficiency of investment to technical innovations. Competition amongst subsidiaries in technical innovation investment results in prisoners' predicament, which could only be resolved through the effect binding and guidance of their parent, who asks for cooperation for maximization of interests of itself and subsidiaries. Analyzing the game of subsidiaries in technical innovation investment, the study advocates that parent company may bind the conduct of subsidiaries through encouragement and punishment, and also probes into the level of encouragement and punishment for the best result.Thirdly, the author tries to guide us on to a way to estimate the value of an innovation according to its impetus to the entire group company, which is resulted from spread effect, besides the economic benefit brought to a subsidiary itself. Considering technical innovation in a bigger scope as in a group company, the author looks through the windows of a subsidiary, for a scientific evaluation method. Positive analysis is also provided in the study, based upon data gathered from a oil and natural gas company.Fourthly, The author tries to explain where and how the interaction takes place between management and supervision and directly influence whether or not technical innovation be able to help an enterprise to maximum its long-term value. The study on lagging effect of technical innovation and interaction between management and supervision personnel when investment is injected into technical innovation proves that, the long-term benefit of technical innovation is bigger than short-term economic benefit it will possibly bring about, and the volumetric investment in technical innovation is lower than long-term optimized investment, and also the investment needs to be supervised. Enhanced penalty on enterprises that are not able to meet the basic requirement on innovation investment helps the increase of probability of investment, but such effect decreases while the level of penalty increases. The penalty on supervision personnel for their faults will also increase the probability of technical innovation investment.Fifthly, technical innovation spillover of a subsidiary will fully or partially absorbed by the group and create value for the group. The author studies from the viewpoint of a subsidiary, looking for a way for the group to encourage and utilize the positive spillover of subsidiary's technical innovation and how to reasonably compensate the subsidiary. The author believes that reasonable pricing of transfer of technical spillover will positively react on a group to effectively utilize the fruit of technical innovations of subsidiaries.The author describes some other characteristics of technical innovation, for example, high risk, high return, and time delay of return, and analyzes natures and problems of every returning cycle. The author also indicates who will be rewarded and how to reward them in different period of technical innovation.Positive as well as policy analysis is provided in each section for every theoretic study, based upon practical data of an oil and natural gas company group.Finally, by conclusion of the study, the author also indicates possible faults and suspending questions in the paper, and expects further study on the project in future time.