Study On The Relation Between Self-interest Of Managerial And R&D Investment Decisions Making

Corporate R&D investment is important for the national innovation development and companies' survival and development.R&D investment in China's enterprises increased year by year,but compared to foreign companies' R&D investment,it still insufficient.There are many reasons influencing the R&D investment.R&D investment has the nature of innovative,high-risk,trans-period income,serious information asymmetry.From the agent perspective,manager,as an agent,has selfinterest motivation,so that he will behavior in short-termism,ignoring the long-term interests of shareholders,and reduce R&D investment behavior.Principal-agent theory suggests that corporate governance mechanism can restrain manager's self-interested behavior,reducing its short-termism behavior.But the innovation theory think corporate governance mechanisms under the principalagent theory roots in neoclassical theory which lead them to focus exclusively on the governance structures that facilitate the optimal utilization of existing productive resources and to systematically neglect the governance of the process through which resources are developed as well as utilized in the economy.Therefore,it is necessarty to consider whether the mechanisms of corporate governance can constrain the selfinterest,then affect R&D investment decisions.This thesis argued that self-interest is an important component of personal values.One of the results of managerial self-interest on strategic decision-making behavior is short-termism behavior.Short-termism in investment behavior shows that,manager would not invest those projects which can not make benefit during his tenure,even though they may make long-term benefit for the company.It results in insufficient investment strategy.corporate governance will have some constraints on managerial self-interest,which affect the short-termism on strategic decision-making behavior.The main works are:on the basis of agency theory and innovation theory,the thesis studied the relation between manager' self-interest and R&D investment,and the moderation effects of two variables-the level of internal corporate governance and the power of institutional investors-on the relation between manager' self-interest and R&D investment.The thesis first,used the data of listed company,calculated the degree of manager's self-interest and the level of corporate governance.Then it tested the empirical assumptions.The conclusions are:(1)Manager's self-interest has a significant negative correlation with the R&D investment.(2)the level of corporate governance has a significant moderation effect on the relation between the relation of the degree of manager's self-interest and R&D investment.(3)the power of institutional investors has a significant moderation effect on the relation between the degree of manager's self-interest and R&D investment.The article is structured as follows:Chapter 1,Introduction.The first chapter describes the research issues in theory and practice background.Then it defines the R&D investment,management,values,managers and other relevant terms of the concept of self-interest,limitations of these study boundaries and provide basis for analysis.Research focuses on the content,significance,research methodology and framework,and the main conclusions of this study and a brief description of the possible innovations.Chapter 2,literature Reviews.First,the chapter analyzes the literatures about factors which effect R&D investment.Then it discribed the theories in the field of corporate governance,including the principal-agent theory,innovation theory,stewardship theory.Third,it explained the ideas of values and upper echelons theory theories,and finally it comments the content above.Chapter 3,Mechanism of Manager's Self-interest on the Company's Strategy Decision-making.The chapter first analyzes the relation between personal values and corporate strategy manager decision-making.Second,it described that managers' selfinterest belongs to personal values,finanlly it analysis the relation among self-interest,short-termism and the company's strategic decision-making.Chapter 4,Theoretical Assumptions and Models.The chapter of this paper first proposed three hypotheses.Then the definition of variables based on this research and finally proposes an empirical model assumptions.Chapter 5,Empirical Analysis.The chapter first describes the methods for sample selection and descriptive statistics for relevant variables,then emprically test the degree of self-interest and R&D investment.Finally,empirically test the moderate effect of the level of corporate governance and the shareholding of institutional investors.Chapter 6,Conclusion and Outlook.The chapter first summarizes the conclusions of this study,followed by the revelations.The study concluded that insufficient and research prospects.The possible innovations in this thesis are:First,discussing the relation between the relation of the degree of manager's self-interest and R&D investment.There are some literatures studying the relation between personal characteristics of managers and R&D investment.But there is no literature studying the manager's effect on the R&D investment from his perspective of management values.This thesis discusses theoryly the effect of manager's selfinterest on short-termism,and then empirical analysis the relation between the degree of manager's self-interest and R&D investment.Second,the thesis empirically analysis the moderative effect of corporate governance on the the relation between the relation of the degree of manager's selfinterest and R&D investment.The formal literatures studied the direct effect of corporate governance on R&D investment levels.In this theis,it analysis its moderative effect.Third,the thesis empirically analysis the moderative effect the power of institutional investors on the the relation between the relation of the degree of manager's self-interest and R&D investment.The formal literatures studied the direct effect of the power of institutional investors on R&D investment levels.In this theis,it analysis its moderative effect.