The Regulating Effect Of The Board Features On The Relationship Between R&D And Firm Performance

The comprehensive national power is symbolized by the levels of science while the investment in research and development is the source of enhancing scientific strength. Since enterprises are the mainstay of creation and innovation of science and technology, research and development is undoubtedly essential to the existence and development. As the technology-intensive enterprises, new generation of information technology enterprises should be more active to develop the R&D activities vigorously, enhance the core technology, dominate new markets and maintain competitive advantage for long-term development. However, the practice has proved that more investment in research and development doesn’t necessarily mean better performance. R&D investment has high risks, its revenue lags behind the investment and it has serious information asymmetry, bringing the R&D activity a serious principal-agent problem, which will influence the effect of the R&D activity and thus influence the development of enterprises. Reasonable corporate governance structure can effectively solve the problem of agency. As the key role in the interior management, the board has a direct influence on important decision-making strategies including R&D investment. Therefore, to explore the relationship between the R&D and enterprise performance within the framework of board governance has an important theoretical and practical significance.This paper selects 347 dates of 137 the new generation of information technology enterprises of Shanghai and Shenzhen Stock exchange from 2009 to 2012 to practically analyze the effect of the board features on the relation between R&D investment and firm performance. In empirical study, we used descriptive statistical analysis, hierarchical regression and subgroup analysis. The results of the study show that:R&D investment and firm performance are positively related in the new generation of information technology enterprises. Share percentage of the board and age of core directors are quasi moderator, which regulate the direction and form of the relationship between R&D and firm performance. The higher share percentage is and the younger core directors are, the greater impact it will have on the relation between the two. Technical background of core directors is a kind of pure moderator, which moderated the direction and forms of the relationship between R&D and firm performance and plays a direct role. The educational level、board size and board meeting are not moderator which have no moderating effect on the relationship.