Research On The Relationship Among Executives Incentive, R&D Investment And Enterprise Performance

With the arrival of the economic knowledge era and the development of science and technology, technology innovation has become one of the important factors of the national economic growth, it is key driving force to survival and the development of the enterprise.According to the Ministry of finance, Ministry of science and technology, the State Administration of Taxation issued "support of national key high-tech fields directory" knowable, high-tech industry, especially the information technology industry has become the focus of research and development investment in china. Expanding the size of our country’s IT enterprise, improving the performance of enterprises.At present stage of our country,it is the core content of the strategic development planning for high-tech enterprises. Our information technology companies in the growth stage, how to improve the R&D performance of the small and medium-sized information technology enterprises in China, is the key problem needed to be solved in the process of national economic development.However, the R&D investment policy in modern enterprises is often a enterprise top management decision, the efficiency and effect of R&D activities have a great relationship with the executive thinking and action. R&D activities have high risk characteristics, like income uncertainty, recovery period is long and so on. It is because of the special nature of R&D activities, business agent and the client goals may not be consistent. Enterprise agents tend to avoid the risk, they are concerned about the person’s occupation safety, reputation and income, rather than the company’s long-term development. They are willing to invest the funds to the project to get instant results, but to be indifferent to the R&D project. For the actual clients(the company’s owners),they are often linked to the interests of the company.They tend to increase business investment in R&D projects, pay attention to the enterprise’s long-term interests. In this way,it will lead to serious agency problems for enterprises.Executive incentive is one of the important methods to solve the principal-agent problem.This paper mainly studies that the relationship between executive incentive,R & D investment and performance of information technology enterprise on SME board. Based on reading a lot of related literature and theoretical research, using the 334 valid data which isbetween the executive incentive and firm performance. Then introduce the regulation variables and using hierarchical regression method for effect of moderating Functioned by executive incentive. The results of this study show that,(1) to the enterprise managers,whether the implementation of equity incentive is long-term or short-term incentive compensation is conducive to promoting enterprise of R&D project investment.(2) the implementation of executive long-term equity incentive and short-term compensation incentive to executives is helpful to improve the business performance of enterprise.(3)increasing R&D investment has positive effect on improving enterprise performance.(4)executive incentive have moderating effect on the relationship between R &D investment and enterprise performance, the executive long-term equity incentive and short-term compensation incentive can promote the enterprise’s R&D investment, improving the efficiency of enterprise R&D activities, and eventually improving the enterprise performance.(5)The moderating effect on the relationship between R&D investment and enterprise performance incentive executives equity relative to the executive compensation incentive is more obvious. Finally, according to the conclusion of the study, from the executive incentive perspective on how to promote the enterprises to increase investment in R&D activities, puts forward some relevant suggestions to improving enterprises performance, and points out the lack of this study and future research prospects.