Research On The Innovation Effect Of Equity Incentives

As the carrier of the national innovation-driven strategy,the willingness of enterprises to innovate is crucial to improving the national overall level of innovation.However,the problems of agency conflicts and short-sighted management decisions that are prevalent under the modern enterprise system have inhibited the enthusiasm of enterprise innovation to a certain extent.Constructing a sufficient incentive and restraint mechanism is an effective solution to this problem.In recent years,as an effective means of relieving corporate agency problems under the modern enterprise system,equity incentives have played an important role in strengthening corporate internal incentives.In this context,the research on the governance effect of equity incentives on corporate innovation activities has become an important topic in the field of corporate governance.At present,the existing research mainly examines the impact of equity incentives on internal innovation investment but has not yet reached a consensus on the relationship between them.Besides,under the joint promotion of strategies such as “innovation-driven strategy” and “supply-side structural reform”,more and more firms have broken through the boundaries of innovation and selected external innovation investment methods such as technology mergers and acquisitions to rapidly upgrade their innovation level.Therefore,whether equity incentives have an effective governance role for such external innovation investment is a research issue that should be focused on,but few scholars have studied this issue in the context of China.Innovation output is the ultimate goal of corporate innovation activities.Therefore,the innovation performance is a final foothold of the study about the impact of equity incentives on enterprise innovation activities.However,the existing research mainly focuses on the impact of management equity incentives on the innovation performance,ignoring the influence of equity incentives of core employees who play an important role in the innovation process.The research on the equity incentives of management and employees has been in a state of separation.Also,the role path of equity incentives affecting innovation performance is a "black box" that has yet to be opened.With the intensification of competition in the external market of enterprises,the above issues urgently need realistic investigation and theoretical answers.Starting from the above issues,this dissertation integrates the classical theory of innovation theory,principal-agent theory,enterprise incentive theory,risk-taking theory,and upper-echelons perspective,and comprehensively examines the impact of equity incentives on enterprise innovation activities from the two dimensions of input and output.Related issues are solved by means of threshold regression,multivariate Logit selection model,panel Tobit regression,mediating effect and moderating effect model.The research work is mainly carried out from three aspects.The main contents and conclusions are as follows:First,from the perspective of internal innovation,the impact of equity incentives on internal R&D investment is examined.Firstly,the inverted U shaped effect of equity incentives on the internal R&D investment is confirmed from the overall perspective.Secondly,the threshold effect between equity incentives and internal R&D investment is empirically tested from the perspective of the influencing factors of equity incentive governance.The results show that the impact of equity incentives on internal R&D investment is limited by the threshold effect of variables such as firm size,financial resource redundancy and equity concentration,which further confirms the nonlinear relationship between them.Second,from the perspective of external innovation,the impact of equity incentives on corporate technology mergers and acquisitions is analyzed.This dissertation first analyzes the impact of equity incentives on the selection of external innovation investment modes such as technology mergers and acquisitions.The result shows that under the influence of equity incentives,compared with internal R&D investment,enterprises are more inclined to conduct external technology mergers and acquisitions;with the coexistence of internal R&D inputs,companies are more likely to engage in technology acquisitions and R&D investments rather than single technology mergers and acquisitions.Besides,based on the perspective of M&A integration,we empirically examine the impact of equity incentives on the scale of corporate technology mergers and acquisitions.The study found that equity incentives are significantly positively correlated with the scale of technology mergers and acquisitions,and pre-acquisition R&D investment has a significant moderating effect on this relationship.Third,from the perspective of innovation output,this dissertation examines the impact and mechanism of equity incentives on corporate innovation performance.This study first confirms the positive impact of equity incentives on corporate innovation performance.Secondly,from the perspective of incentives objects,we discuss and confirms the promotion effect of management equity incentives and core employee equity incentives on corporate innovation performance,and the core employee equity incentives performs better;thirdly,we confirm the different roles of internal R&D investment in the process of management equity incentives and core employee equity incentives to enhance corporate innovation performance,and uncovers the “black box” of equity incentives affecting innovation performance and the path dependence of equity incentives affecting innovation performance was found.There is mainly four possible innovation in this dissertation:First,from the two processes of innovation investment and innovation output,the dissertation deeply analyzes the impact of equity incentives on enterprise innovation activities,deepens the research content of equity incentive innovation effects,and reveals the mechanism of the impact of equity incentives on corporate innovation activities from a more comprehensive and complete perspective.Second,for the first time,the threshold effect of equity incentives on R&D investment was investigated,and the original research paradigm of equity incentives and R&D investment was broken,therefore,the non-linear impact of equity incentives on R&D investment was demonstrated from a new perspective,and promote the resolution of the controversial relationship between them.Third,we examine the impact of equity incentives on technology mergers and acquisitions in China's context,and expands the existing research perspective of equity incentives and corporate innovation investment from the inside of the corporate innovation boundary to the outside,filling the existing research gaps.Fourth,along the shareholder-management-employee principal-agent chain,the research scope of the impact of equity incentives on corporate innovation performance is extended from the decision-making layer of the innovation strategy to the executive level,and by discussing the different roles of R&D investment in the relationship between management equity incentives and core employee equity incentives and innovation performance,unveiled the “black box” of the impact of equity incentives on corporate innovation performance,and further confirmed the path dependence of equity incentives on innovation performance,make up for the shortcomings of existing research.