Research On Optimal Incentive Model Of Government Leading Enterprises To Invest In R&D Based On Principal-Agent Theory

In the face of ever-changing pattern of global competition, the world is paying moreand more attention on innovation and development of economic and scientific strength,China is also on the track of innovation-oriented country to explore and advance R&D(Research and Development, R&D). As an important factor to measure a country’stechnological development and innovation, R&D should arouse the attention ofgovernment and society. It is conducive to improve the national innovation capacity byenhancing the investment in science and technology. It is also the key factor to promote theharmonious development of economy and society. Analyze national science andtechnology inputs constitute, we can find out the corporate R&D investment is dominant,whilst the Government Financial input plays an important guiding role, so explore theimpact effect and the incentive mechanism of government guiding enterprises to increaseR&D investment, establish entrust-agent incentive model, sought after optimal incentivescheme, thereby increasing the incentive efficiency of the government on corporate R&D,therefore it is an important subject in the study of management science theory andmethodology.This article covers three aspects: Firstly, the status quo analysis of the R&Dinvestment, and the impact of government technology investment on the corporate R&Dinput, the necessity analysis of government encouraging the enterprises to increase theR&D investment; Secondly, based on commissioned-agent theory framework, in the caseof multi-stage dynamic game, the reputation model and the ratchet effect of governmenttechnology investment incentive model on the enterprise is studied, coming to theconclusion that the necessity of introducing rank-order tournaments, so as to solve thecontract parameters of government incentives for corporate R&D investment; Thirdly, incombination of Shandong provincial investment in science and technology-the R&Dinvestment of mainly industrial enterprises above designated size to proceed empiricalresearch. According to the model and empirical results of the study, five suggestions areput forward.This paper analysis and research come to the following conclusions: Firstly, theincentive role of government R&D investment toward the enterprise will be weakenedunder the reputation model, the government must increase the investment in science andtechnology budget and disbursement of funds, making a smooth external utility generatedby incentive contract available; Secondly, incentive behavior of government R&D investment on the corporate may also have a ratchet effect, the Government must introducea comparative performance; Thirdly, introduce the comparative performancetwo-dimension (horizontal and vertical) under the championship to fully play incentives.The multi-stage dynamic game model within the commission--agent theory is used inthe establishment of the incentive model of the government R&D investment on theenterprise. The solving methods of the established incentive model and incentive contractof Government science and technology investment versus enterprises the R&D expenditurecan enrich the management science’s theory and methodology, which reaches thesignificance of the theoretical innovation; Carry out empirical research on our provincialgovernment encouraging the enterprises to increase R&D investment, whose analysisresults can be directly for the reference of decision making the concerned technologysector and management sector, therefore, it is of great application value.