How The CEO’s Political Promotion Affect The R&D Expenditure Of The SOE?

On the one hand, a state-owned enterprise executives is a state cadres, his appointment has strong administrative color; On the other hand, as a business person, he also has the "economic man" status. Some researchers finds that leaders in CSOEs look more likely government officials rather than professional managers, so they have strong political promotion career concerns.The new accounting standard of 2006 implemented conditional capitalized research and development costs, to a certain extent stimulated the enthusiasm of R & D investment for solving the adverse impact on the current profit worries, but it did not disclose a standardized development, the executives may have a variety of options on whether to disclose and how to disclose R & D expenses for different motivations.In this paper, we use the 2007-2011 panel data of A-share listed SOEs in 2007-2011 panel data to explore the relationship between SOE CEO political promotion incentive and corporate R & D expenditures.The results show that political promotion and R&D expenses were negatively correlated, but was positively correlated with the development expenditure, the higher the likelihood of political promotion’s CEO, the lower the R & D expenses, while development expenditure will increase.