Relationship Between Equity Incentive And Corporate Innovation Performance

Facing the financial crisis and the European debt crisis, many countries tried developing new industries so as to get out of the economic morass and embark on a new development. For example, the United States has developed a new energy strategy, and the EU selects green incustry represented by green energy and green building as its emerging strategic industry. China also actively participates in this "new revolution", the government has made a series of initiatives to develop its strategic emerging industries regarding them as a breakthrough in economic restructuring and industrial upgrading.For the strategic emerging industries, the requirement of "basing on major technological breakthroughs" determines innovation as its development theme. The key to enhance the independent innovation capability of the strategic emerging industry is motivating the innovative talents. Equity incentive is a kind of system innovation which may help enterprises promote their independent innovation capability. Research of the effect equity incentive to innovative talents has on innovation performance of enterprises in strategic emerging industries has theoretical and practical significance.Most of the research put focuses on the impact that equity incentive has on corporate financial or market performance, few explore the relationship between equity incentive and corporate innovation performance. Also, those studies mainly take executives but core staff as their research object. Third, research on innovation performance stays on the macro-level such as regional innovation performance and industrial innovation, very few studies take enterprises as their research unit. In this paper, we select listed companies of strategic emerging industries as our data source, executives and core staff in those companies as the object of our research, trying to explore the relationship between the equity incentive and corporate innovative performance, and the two common types of equity incentive including stock options and restricted stock which one has a better impact on corporate innovation performance using regression analysis. With the help of SPSS17.0, we found that equity incentive can help improve corporate direct innovation performance while its impact on corporate indirect innovation performance is not significant. What’s more, Restricted stock has a better impact on corporate innovation performance than stock option. It has a certain reference for the enterprises in strategic emerging industries to better motivate creative talents to enhance their capability of independent innovation.