Study On The Moderating Effect Of TMT Characteristics On The Relationship Between R&D Investment And Firm Performance

In the21st century, the competition is essentially the competition of knowledgeand technology. In a rapidly changing, instability of the complicated competitionenvironment, the companies begin to realize the importance of R&D in order to obtainthe sustainable competitive advantage. With the increasing of R&D investment in thecompany, the implementation of R&D investment is increasingly gaining more andmore attention. Top management team (TMT) has important influence on strategyformulation and strategy implementation for R&D activities as the leading team ofcompany. Their cognition and values influence the enterprise R&D investment andpromotion, finally affect the firm performance. Therefore, the paper basing on theperspective of top management team, discussed the moderating effect of thecharacteristics of TMT on the relationship between R&D investment and firmperformance.Literatures relating to the relationship between R&D investment and firmperformance were presented at home and abroad, as well as the moderator effects onthe relationship between R&D investment and firm performance by a detailed reviewfirstly. Secondly, after defining the related concepts, importing TMT to therelationship of R&D investment and firm performance, we analyzed how to influencethe relationship of R&D investment and firm performance, in the end, on the basis ofthe perspective of TMT population background characteristics, we explained TMToperation in theory. Combining with theoretical analysis, we putted forward to thehypothesis about the moderating effect of TMT characteristics on the relationshipbetween R&D investment and firm performance, and carried on the empirical test.Using Shenzhen and Shanghai a-share listed companies from2010to2012yearlydata as the research object, we empirically studied on the relationship between R&Dinvestment and firm performance, and adding to TMT characteristics variables andthe interaction between TMT characteristics variables and R&D input, multivariateregression model was established respectively, tested the moderating effect of TMTcharacteristics on the relationship between R&D investment and firm performance.The results showed that the TMT average age and TMT technical level had positivelymoderating effect on the relationship between R&D investment and firm performance;TMT term heterogeneity and professional experience heterogeneity of TMT hadnegatively moderating effect on the relationship between R&D investment and firm performance. TMT average term, TMT average education level, the heterogeneity ofage and education level had not through the test of significance for moderating effecton the relationship between R&D investment and firm performance.Finally, we discussed the research results, and putted forward to some relevantenlightenment about the construction of the TMT. In the aspect of optimizing thestructure of TMT, firms need to keep the reasonable age structure for TMT,appropriately introduce top managers with the technical background into the TMT,appropriately decrease TMT term heterogeneity; in the aspect of establishingexecutive team effective mechanism, firms need to establish effective TMT learningmechanism, communication mechanism, the conflict of early warning mechanism. Atthe same time, we pointed out the deficiency in this paper, and putted forward to theprospect for further research later.