Top Management Team’s Human Capital Characteristics, R&D Investment And Enterprise Performance

As the corporate decision-makers, Top management team is not only the importantelements of human capital in the enterprise, but also the core group of affecting theenterprise strategy choice and performance. Since “the Upper Echelons” was putforward in1984, executive team members’ individual characteristics (age, educationbackground, technical experience, etc.) have affected the enterprise’s strategic choiceand enterprise performance, the study on the relationship between the human capitalcharacteristics of top management team and enterprise performance has become thefocus of academic.The academia has gained rich research results that the managers’ personalcharacteristics and top management team’s background characteristics have directimpact on enterprise performance. But I find that their study mainly focused on theMain-Board, Small and Medium Enterprise Board Market, the papers are lack of usingmediator study the indirectly affect on the relationship between the human capitalcharacteristics of top management team and enterprise performance. Based on the GEMmarket is mainly oriented to high growth and high-tech small and medium enterprise,R&D investment decision and enterprise performance have more dependence on the topmanagement team, this article chooses the GEM-listed companies and the main line“characteristic-behavior-consequence”, choosing the R&D investment as thehitting-point, an empirical analysis of the human capital of the top management impacton the enterprise performance through R&D mediator, in order to give advice for theconstruction of the top management team in the GEM companies.First, this article reviews the human capital theory, the Upper Echelons andtechnological innovation theory, analyzing that the top management team’s humancapital characteristics have impact on R&D investment and enterprise performance. Byselecting154GEM-listed companies as the samples, this paper constructs the multipleregression model do the empirical analysis. We have three results from the empiricalanalysis. Firstly, the top management team’s tenure, technical background and size haveno significant effect on enterprise performance; while average age shows negativecorrelation with enterprise performance, education lever has significant positive effectson performance. Secondly, the regression analysis shows that the top managementteam’s average age has significant negative influence on R&D investment, while team’s education level, average tenure, technical background and team size show significantpositive correlation with R&D. Thirdly, this paper tests the mediator effect in order toprove whether R&D is the mediator between the human capital characteristics andenterprise performance. The result shows that the top management team’s age andeducation level have indirectly impact on enterprise performance only partly throughthe R&D investment. At last, based on the empirical conclusion, this paper makes somesuggestions for the GEM executive team construction and the development of enterprisein the future. Besides, this paper also puts forward the outlook for the researchdeficiencies.