Private Equity Investment,executive Incentive And Corporate Innovation Performance

Innovation is the first power to lead the development and the key to keep the competitive advantage of enterprises.Since the 18th National Congress of the Communist Party of China,China has persisted in implementing the strategy of "innovation-driven development".As the same time.China has broken through a number of key core technologies.The number of patent applications has always ranked first in the world.It can be said that China has become a veritable innovator.However,as China’s economic development has entered a new normal and the economy has shifted from a stage of high-speed growth to a stage of high-quality development,higher requirements for innovation have been put forward.In particular,in the context of the prevalence of global unilateralism and protectionism,foreign governments and institutions have repeatedly sanctions to impose scientific and technological blockades on our enterprises.As a result,the key technologies of our enterprises in key areas are still limited by fatal shortcomings.Faced with the new situation and new tasks,to complete the transformation of China from an innovative power to an innovative power,Chinese enterprises urgently need to overcome a number of technical difficulties that are "choking off",earnestly improve their key technological innovation capabilities,and take the initiative in the development of science and technology into their own hands.However,in the process of Innovation and R&D,on the one hand,enterprises should consider the protection of business secrets.On the other hand,due to the imperfect information disclosure system,enterprises’ R&D information disclosure is insufficient,which increased pressure on corporate financing constraints.At the same time.Innovative R&D is characterized by high risk,long duration and large scale of investment.On the basis of lack of professional background,it is difficult for small and medium-sized investors to effectively discriminate limited disclosure of enterprise R&D Information.This leads to a further reduction in the recognition of the value of the enterprise.The private equity industry has long focused on equity investments in unlisted companies,investing in high-risk projects and pursuing high returns,which is highly compatible with corporate investment innovation and research.A review of the prospectuses of Chinese listed companies shows that more than half of them received private equity investment in the process.This cannot help but cause thinking,with the Enterprise Innovation R&D High Fit of private equity investment,whether it will improve enterprise innovation performance?Does this improvement have an impact on patent categories or on patents for inventions that can represent the quality of innovation?If there is an impact,what is the underlying mechanism?Is there any difference in the impact of different background private equity investment?In different property rights contexts,what about this kind of impact?The above questions are very important to guide Chinese enterprises to improve their innovation ability and realize high-quality development.However,there are few achievements in this field.From the perspective of corporate management,this paper constructs a theoretical model of"Private equity investment-Executive incentive-Enterprise innovation performance".On the basis of this,this paper tests the theoretical model by comprehensive empirical research,and analyzes the effect of Private Equity Investment and Enterprise Innovation Performance.This paper also innovatively discusses the internal mechanism and realization path of private equity investment influencing enterprise patent output on the basis of patent heterogeneity,and examines the mediating role of executive motivation between the two.There are seven chapters in this paper,which are arranged as follows:The first chapter introduces the research background.the research purpose and significance,the research content,the research method,the main innovation point and so on.It also defines the related concept and establishes the research frame from the whole;The second chapter systematically reviews the related theories.;The third chapter,based on the analysis of China’s institutional background,analyzes the related research theories to provide theoretical support for the follow-up research;The fifth chapter examines the effects of executive compensation incentive and executive stock option incentive on innovation performance and innovation strategy;The sixth chapter examines the mediating role of executive incentive between private equity investment and innovation performance;The seventh chapter summarizes the full text,summarizes the main research conclusions,proposes the related policy enlightenment,and points out the research limitation and the future research direction.Based on the division of innovation performance and the definition and measurement of executive incentives,through theoretical analysis and research assumptions,the following main conclusions are reached:(1)The participation of private equity investment plays a significant role in promoting the innovation performance of enterprises;Private equity investment has a more positive effect on the non-invention patents of enterprises,but has no effect on the invention patents of enterprises.These effects are more pronounced in non-state-owned enterprises.Further investigation on the different backgrounds of private equity investment shows that under the local background or the single-investment private equity investment situation,the "strategic innovation" represented by the non-invention patents such as utility model and design is improved significantly,while the "substantial innovation" represented by the invention patent has no effect.(2)Executive compensation incentive and executive stock option incentive have significant positive effects on innovation performance,but they do not play an effective role in state-owned enterprises;Executive compensation incentive mainly improves the output of "strategic innovation",while executive stock incentive mainly improves the output of "substantial innovation",which is more obvious in non-state-owned enterprises.(3)Executive incentive plays an intermediary role between private equity investment and enterprise innovation performance.Specifically,private equity investment promotes enterprise"strategic innovation" through executive compensation incentive,executive Equity Incentive can effectively improve the impact of private equity investment on "substantial innovation" and restrain the effect of private equity investment on "strategic innovation".In the context of private equity investment with local background or single investment,as well as in non-state-owned enterprises,executive compensation incentive also plays an intermediary role between private equity investment and "strategic innovation",the improvement effect of executive stock incentive on "substantial innovation" and the inhibition effect on "strategic innovation" still exist.The main innovation of this paper is embodied in the following three aspects:Firstly,from the perspective of the Heterogeneity of R&D output,combining the principal-agent theory,corporate governance theory and financing constraint theory,this paper analyzes the heterogeneous influence of private equity investment on enterprise innovation performance,and expands the related research achievements of private equity investment and enterprise innovation.Secondly,this paper discusses the heterogeneous effects of executive stock incentive and executive compensation incentive on innovation performance,based on the internal incentive mechanism.It expands and deepens the relationship between executive motivation and enterprise innovation.Thirdly,the paper constructs the theoretical framework of "Private equity investment-Executive incentive-Enterprise innovation performance".In this paper,the methods of private equity investment,executive equity incentive,executive compensation incentive,enterprise innovation performance,enterprise substantive innovation behavior and firm strategic innovation behavior under different characteristics are included in the overall analysis framework.This paper empirically examines the heterogeneous results of firm innovation performance under differential private equity investment,and the mediating role of internal incentive mechanisms such as executive equity incentive and executive compensation incentive.According to the research conclusion,this paper provides policy enlightenment to the government,industry,enterprises and investors:The government should strengthen the training and supervision of Private Equity Investment Industry.As the same time,the government should establish and improve the IPO examination system and the information disclosure system of enterprise innovation performance,create a tolerant environment of innovation failure in state-owned enterprises,and strengthen the protection level of intellectual property rights;To guide the private equity investment industry to return to the pursuit of long-term returns,and to form the investment concept of healthy and sustainable development.The transformation and development of the traditional industry can actively introduce private equity investment and improve the innovation level of the industry;Finally,the micro-enterprises should set up the innovation consciousness of enterprise managers,standardize the incentive behavior of senior managers to play a correct role,and choose the private equity investment consistent with their own development goals;Investors need to screen innovation performance of enterprises,for the enterprises with a large number of patents,they need to further study the specific number of their various types of patents and focus on enterprise invention patents.