A Study On The Relationship Among Managerial Power,R&D Investment And Corporate Performance

Nowadays, productivity improvement has become an increasingly important driving force for both economic growth and social prosperity with the development of economic globalization. Under the circumstances of other means of production becoming increasingly homogeneous, technological innovation has come into a winning point of strategy for a business to seek market dominance status. On the one hand, R&D investments lay the foundation for capability of technological innovation with great significance of enhancing the core competitiveness of enterprise performance. On the other hand, decision makers and people on duty of implementing R&D investment decisions are the management, on agency theory and the theory of managerial power, managerial power can influence the allocation of resources to R&D investment decisions, thus affecting R&D investment project is based on the implementation of the results, and ultimately influent the company’s performance. After the implementation of the new accounting standards in2007, on the one hand, new standards require the listed company must disclose the amount of research and development expenditure in the notes to financial statements, so we can get the R&D expenditure data easily than before; on the other hand, conditional capitalization increased the enthusiasm of enterprises to carry out R&D activities. Therefore, the relationship represented by managerial power and R&D investment deserves to study.In the new policy context, this paper is based on the principal-agent theory and the theory of managerial power, using the research methods such as factor analysis and multiple regression. The paper deeply analyzes the relevance among the managerial power, R&D investment and firm performance by detailed review of the relevant literatures of the early home and abroad, selecting from2007to2012in Shanghai and Shenzhen listed A share companies which disclosure both R&D expenses and relevant index of managerial power as the research object. Thus, the study on the correlation among managerial power, R&D expenditure and corporate performance has important theoretical and practical significance.The paper is organized as follows:The first part of this study involves the research background, research significance, the concept of managerial power, R&D investment and corporate performance, research method, research framework, as well as the innovation point of this paper. The second part of the study is literature review, which summarize the related research of the relationship between managerial power, R&D investment and also corporate governance which clarify the research status and emphasis. The three hypothesis based on the theoretical analysis which include the principal-agent theory and the theory of managerial power was given out in the third part of this paper. Then, the fourth part is empirical research including model design, sample selection and multiple regression, which will put out further research and analysis about the R&D investment intensity and effectiveness related to managerial power. Finally, the conclusion and suggestion of this subject is in the fifth part of this paper which also summaries the deficiencies of this paper, as well as the recommendations for the further study.Eventually this paper reached the following conclusions:(1) The managerial power can promote R&D investment that means a powerful managerial layer can support and push R&D investment.(2)Under the influence of managerial power, non-state-owned enterprises group have more significant impact on R&D investment intensity than state-owned enterprises. Furthermore, non-state-owned enterprises have positive effect but state-owned enterprises has negative influence.(3)Managerial power can enhance R&D investment effectiveness, in other words, R&D investment can achieve better corporate performance with the managerial power.(4) Under the influence of managerial power, state-owned enterprises group have more significant impact on R&D investment effectiveness than non-state-owned enterprises.Based on the empirical research results, this paper give out some suggestions from corporation and government perspective in order to be able to provide relevant help to the listed company as follows:such as pay attention to R&D investment, put forward reasonable standards on managerial power, reduce administrative intervention for state-owned enterprises and improve national manager market, etc.