Executives Holdings, R&D Investment And Corporate Performance

As a new economic form, intellectual economy was emerging in china recent years, and in the mode of this intellectual economy, knowledge, technology-oriented enterprises have become the most dynamic economic organizations, it represents the future direction of economic development. Science and technology truly become the primary productive force. The practice of developed countries in the world shows that:technological innovation process is also the process of research and development. Thus, both from the macro and micro perspective, R&D investment has gradually attracted the attention of the parties.As early as2005, China has put forward the development strategy of innovation-oriented country, and focus on increase the R&D investment share of GDP, determine china will entry into the ranks of innovative countries by2020; for business, with the rapid development of science and technology, high and new technology change rapidly and the market competition is increasing vigorous, R&D become more and more important especially for high-tech enterprise. Along with the increasingly important function of R&D investment, especially after the implementation of the new accounting standards in2007, on the one hand, new standards require the listed company must disclose the amount of research and development expenditure in the notes to financial statements, so we can get the R&D expenditure data easily than before; on the other hand, conditional capitalization increased the enthusiasm of enterprises to carry out R&D activities. So, in the new policy context, study the correlation between R&D expenditure and corporate performance has important theoretical and practical significance, it not only help promote enterprise attach importance to R&D and improve its core competitiveness; also beneficial to enhance the comprehensive national strength, realize the goal of build an innovative country early.This paper is based on the equity incentive theory, the principal-agent theory and the theory of technology innovation and so on, using the research methods such as multiple regression and hierarchical regression, deeply analyzed the relevance among the executives shareholdings, R&D investment and firm performance, detailed review of the relevant literatures of the early home and abroad, selected2007to2011in Shanghai and Shenzhen listed companies which disclosure both R&D expenses and executives stake as the research object, examined the impact of R&D investment on firm performance and the regulation of executive ownership effect, eventually reached the following conclusions:(1) The executive ownership can promote R&D investment, but when the executives shareholding ratio is too low, the incentive effect is not obvious, only when the executives shareholding proportion reaches0.1%,the executives shareholding and R&D investment has significantly positive correlation;(2) R&D investment will help improve business performance, however, the contribution rate of R&D investment is different in difference industry, in general,it has more significant correlation in high-tech enterprises;(3) The executive stock ownership has a positive role in regulation of the relationship between R&D investment and corporate performance, in other words, executives holding can strengthen the relationship between R&D investment and corporate performance.The paper is organized as follows:The first part is introduction, an overview of the research background, the purpose of research, as well as research significance; The second part is theoretical analysis and literature review, elaborate on the theoretical basis of the equity incentive and R&D expenditure, and sort out the domestic and international research literature on executive stock ownership, R&D expenditure and corporate performance’s correlation; the third part is study design, put forward the research hypotheses on the basis of theoretical analysis, and select the listed companies who disclose both R&D expenditure and executives shareholding ratio between2007and2011as the research object, than, defined variables; The fourth part is empirical test results and analysis; the fifth part of the study is conclusions and outlook,summarize the research results of theoretical analysis and empirical tests, reached the following conclusions.The innovation of this paper lies in:(1) Besides research the correlation between R&D investment and firm performance, we broke the traditional research mentality, add the corporate governance factor into the model, put executive stock ownership, R&D investment and business performance into the same analytical framework to study the correlation among them. Thus, the results of the study can guide the implementation of equity incentive in our list companies;(2) This article select the listed companies data after the implementation of the new accounting standards, provide the latest empirical evidence for the enterprise implementation of equity incentive and increase R&D investment. However, due to the subjective and objective conditions, there is still having some shortcomings:the new standards did not explicitly provide for the disclosure of R&D expenses, leading the listed companies in R&D expenses disclosure is not uniform, this affect the accuracy of the R&D expenditure data in a certain extent. In addition, this paper only considered the R&D fund investment, future research can analyze R&D personnel.