Research On How Listed Companies’ Characteristics Of Top Management Team And Executive Incentive Affect The Companies’ R&D Investment

Along with the continuous development of market economy, countries around the worldhave recognized the innovation can not only gain a competitive advantage, but also providesource of power for the long term development of the country and the world economy.Therefore, countries around the world coincidentally bring the level of innovation to improvethe country’s development strategy, so that innovation capability draws more and moreattention. In our country, enterprises have gradually become the main technological innovationof the state, China’s listed companies in particular plays a pivotal role in the ability to innovateon behalf of corporate size, and other aspects of improving the competitive advantage. Aftermore than20years of development, listed companies in China have improved their innovationcapacity rapidly. However, compared with developed countries, the problem of low levels ofR&D investment still widespread. The level of R&D investment is connected with a variety offactors, the top management team affect company’s R&D investment is particular importantamong those factors. In this paper, we use empirical methods to analyze the correlationbetween the two, and based on the analysis to make recommendations and countermeasures.Firstly, the paper used statistical analysis of data to analyze the R&D investment level ofcountry as a whole, enterprises and listed companies to drawn R&D investment in China’slisted companies’ features; The paper also analyzed the characteristics of China’s listedcompany executives and senior management team excitation level to provide the basis forempirical analysis. Secondly, the paper used the theoretical analysis to analyze how thecharacteristics of the top management team affect companies’ R&D investment, and on thebasis of the analysis, the paper introduced executive incentive as situational factors, the paperbuilt the relational model between characteristics of top management team and R&Dinvestment to provide a theoretical basis for the empirical analysis. Once again, the paper selected1216listed companies between2010and2012as a sample of valid data, selected theR&D intensity, twelve indicators to measure the characteristics of top management team andthree indicators of executive incentive measure. The paper used the valid data of listedcompanies between2010and2012, used executive incentive as moderator to construct aregression model between between characteristics of top management team and R&Dinvestment.The results of this paper showed that:(1) Characteristics of top management teamsignificantly affect the company’s R&D investment. There is a strong negative correlationbetween average age of executives, heterogeneity term, educational level heterogeneity andthe R&D intensity. The paper also found a significant positive correlation between the averageeducation level of executives, professional background, average tenure, age heterogeneity andthe R&D intensity.(2) There is a significant positive correlation between executive equityincentive and the R&D investment of company.(3) Executive incentive has played asignificant role in regulating the relationship between the characteristics of top managementteam and the R&D investment of company, Incentive compensation and equity incentiveplayed a semi-regulatory role, the relationship between promotion incentives on topmanagement team characteristics and R&D investment of company played a purely regulatoryrole.Finally, this paper is based on R&D characteristics of Chinese listed companies andempirical conclusions. The paper made the following recommendations and suggestions:reasonable construction of top management team, optimize the structure of the topmanagement team, widespread introduction of managerial ownership incentives, focus onexecutives promotion incentives, the importance of high innovative achievements affect salaryassessment. The paper provided a reference for other scholars and managers.