R&D Investment, Managerial Incentive And Performance Of High-tech Enterprises

R&D investment and executive incentive are the factors that affecting enterprise performance, reasonable investment and investment level can improve its performance significantly. There is a significant relationship between R&D investment, compensation and equity incentive of managers and corporate performance, while the existed research ignored the endogenous relationship between these. The study focuses on the elaborate linkage by residual claims, conspiracy checks and balances, signal transmission mechanism, and gets the relationship by empirical analysis in order to get new ideas.From a perspective of endogenous, this paper taking the listed high-tech companies in SMEs stock market from 200 to 2012 as sample, and propose the hypothesis based on the game model and literature review,specifically, the rate of value-added is used to measure the enterprise performance and the firm size, ownership structure, governance structure and financial position are set as control variables, and the simultaneous equations model is built including R&D investment and executive Incentive. The results show that R&D investment has a negative effect on current enterprise performance while the lag effect is signifiant and positive. And managerial salary incentive and equity incentive present inverted U-shaped relationship and positive effect with enterprise performance respectively. It’s worth mentioning that this phenomenon is also applied to private enterprises but not so significant in state-owned enterprises. Appropriate policy recommendations are proposed from the level of government agencies and businesses.