Two Layer Under The Executive Equity Incentive Effects On Enterprise Technology Innovation

By the end of2005, the China Securities Regulatory Commission issued thelisted companies Equity Incentive management measures. In this paper,uses2006to2010yeas shenzhen and shanghai A-share listed companies for sample，researches theimplementation of executive equity incentive and deviation of the ownership andcontrol effect on technological innovation. According to the industry of stratifiedrandom sampling, selects600listed companies through they have been listed in theend of2008.On the implementation of equity incentive to executives of the equityvalue for that year the company’s share capital ratio as executive equity incentivemeasure index, and patent application and grant authorization as the technologicalinnovation measure index, discusses on executive equity incentive effects ontechnological innovation in different industries. Difference on the actual controllerhas the control and ownership rights as the deviation of two rights index, discusses thedeviation of two rights effects on technological innovation. And also discusses thedifference to technological innovation on the different character of the controllingshareholder, and using the invention patent as a substitution variable to regress again.The results showed that:First, for the delayed impact of the relationship between executive equityincentive and technological innovation, the restricted stock incentive and applicationof patent has a lag length, remaining there is no lag period.Second, it was a significant positive correlation between the implementation ofexecutive equity incentive and technical innovation. It showed that senior executiveshad more proportion of the equity incentive, more conducive to enhance technologicalinnovation capability of enterprises. Grouped by industry into manufacturing andnon-manufacturing samples, it discovered that innovation capability in manufacturingcompanies were better than non-manufacturing’s. It illustrated to be different inindustry, and has different the implement of executive equity incentive effects on the technological innovation.Third, different types of equity incentive had significant influence on the abilityof technological innovation. To the implementation of executive of stock optionincentive’s companies, the companies which implemented restricted stock were betterin the ability of technological innovation. This is mainly manifested in whether patentapplication or authorization, the implementation of executives of restricted stock hadstronger correlations. Because it related to the stock option which existed high incomeaccompanied by high risk, the exercise price and authorized by the price are definedand had costs disadvantages.Fourth, the greater the deviation of the control and ownership, the moreconducive to improve capability of enterprise’s technological innovation. It showedthat greater difference between control and ownership proportion for the actualcontroller, more conducive to enterprise technological innovation activities. In thecontrol and ownership rights focused company, listed companies have no incentive tocarry out technical innovation activities.Finally, on the different types of controlling shareholders, the deviation of thetwo rights of enterprise had different effect on the ability of technological innovation.After dividing into state-owned and non state-owned controlling shareholders samples,it found that the deviation of two rights had positively related to technologyinnovation in the state-owned shareholders samples, and there was no significant inthe non state-owned samples. And the deviation of two rights under the state-ownedcontrol samples was more significant than the full sample. It is perceived that nonstate-owned listed company exists in resource scarcity, financing and other issues ledto lack of motivation in the enterprise technology innovation.Therefore, the state should guide the listed companies in terms of policy taken inthe implementation of the executive restricted stock incentive, positively encourageenterprise in their efforts to enhance the ability of technological innovation. Forexample, the state gives the privilege on policy support. The enterprises shouldchoose the diversification of equity incentive type,and ultimately choose the best forthe enterprise’s own incentive way.