A Study On R&D Investment And Corporate Performance Under High-ranking Managers’Self-interest Motivation

With the development of economic globalization, technical innovation activitybrought about the improvement of production efficiency which has become the mostimportant factors to promote economic growth and prosperity. R&D investment is thefoundation of an enterprise to form technical innovation ability, also is the mostimportant way to obtain the advantages of technology, which has great significance toraise company performance and enhance core competitiveness. On the economic manassumption, company executives are self-interests who will not only affect the R&Dinvestment decision but also affect the allocation of resources which will finallyimpact on the performance of the company. From microcosmic level of enterprisesand financial perspective, this paper makes an empirical research on R&D investmentand corporate performance under high-ranking managers’ self-interest motivation byusing the data from China’s capital market.First of all, the theory part starts from defining the related concepts, combinedwith the enterprise competence theory, the principal-agent theory and the dynamics ofendogenous theory analysis framework, making an analyses between R&Dinvestment and corporate performance under high-ranking managers’ self-interestmotivation; Secondly, the empirical part puts forward the hypothesis according totheory analysis, at the same time chooses companies from China’s capital market asthe research samples and constructs a regression model; then, using Excel, Stata11.0statistical software to make an statistical analysis for each variable; finally, usingpanel data and system GMM estimation method to do an empirical test and come toconclusions.The research results show that:(1) in the control of dynamic endogenous effect,the current and previous two years R&D investment has a significant promotion effecton current company performance; the current and previous two years companyperformance also has a significant promotion effect on current R&D investment.(2)The president also served as general manager is no good for raising R&D investmentand improving corporate performance; High-ranking managers have the stocks of thecompany has positive relationship with corporate performance and negativerelationship with R&D investment; Higher proportion of shareholdings and biggersalary have positive effect on R&D investment; we also find a inverted U-shaped relationship between high-ranking managers’ tenure and R&D investment;High-ranking managers’ age and R&D spending have a negative relationship.(3) Innon-state-owned enterprises group the R&D investment have more significant impacton corporate performance than state-owned enterprises and the effect of incentivemeasures are better to the non-state-owned enterprises. Finally, according to theconclusion of the study, we give some policy recommendations from the perspectiveof interest distribution mechanism, internal government mechanism and marketmechanism to realize the company R&D resource reasonable configuration andperformance continuously upgrade.