An Empirical Study On Top Management Team Characteristics And R&D Investment Behavior In Small And Medium Enterprises

Innovation is the fundamental way for enterprises to obtain a sustainablecompetitive advantage. To win the rapid development in the fierce market competitionduring their startup and growth stage, small and medium enterprises (SMEs) have noalternative but to pursuit product, service or business model innovation. In the contextof constructing innovative nation and developing strategic emerging industries, SMEshave become the core force of promoting independent innovation and forming newindustries. R&D (Research and Development), as a key link of the innovation process,plays a vital role to enhance the innovation capacity and raise the core competence forcorporations.From the perspective of upper echelons theory，this paper empirically studies therelationship between top management team (TMT) characteristics and R&Dinvestment of the innovative SMEs by taking listed companies on Chinese growthenterprise market during the period of2009-2012as research samples. The resultsshow that: TMT average age is negatively related to R&D investment intensity inSMEs, while the average level of education, average tenure and career experiencepositively related. There is no significant effect of TMT average shareholding rate onR&D investment. But after categorizing the sample into two groups by the existenceof turnover within one year for executive with shareholdings, we find that R&Dinvestment intensity is significantly positive with TMT average shareholding rate inthe group without turnover, while the opposite in the group with turnover. This paperalso finds that government subsidies can make a significant stimulating effect on theR&D investment of innovative SMEs in China.