Relationship Between Equity Incentive And Corporate Innovation Performance: Evidence From Strategic Emerging Enterprises

With the rapid development of today’s new technologies and new industries, new industries are becoming an important force for future economic and social development. In recent years,emerging strategic industries being the adjustment of economic structure and the breakthrough of achieving industrial upgrading,China has made a series of important initiatives on the development of emerging strategic industries.The requirement of "Major technological breakthrough" determines the theme of strategic emerging industries is innovation. Stimulating innovative talent is the key of enhancing the independent innovation capability of strategic emerging industries. As an institution promoting innovation and enterprise innovation, doing research on implementing equity incentive to innovative talents in current strategic emerging industries have theoretical and practical significance on impact effect on enterprise innovation performance results.By far, there have been researches focusing on equity incentive impact on corporate financial performance from home and abroad, however, they lack the research on equity incentive impact over enterprise innovation performance. Secondly, the current equity incentive researches on innovation performance are generally for general corporations, and less for the high-tech enterprises, especially for strategic emerging enterprises. Thirdly, the current equity incentive researches on innovation performance are against executives, which included fewer core backbones. Fourthly, the former researches are less for delayed effect of equity incentive effect on innovation performance. Fifthly, very few current studies on equity incentive effect on innovation performance are from their own design factors and the perspective of corporate governance structure both internal and external.This paper considers the delayed effect of equity incentive effect on innovation performance, and use public companies implementing equity incentive in strategic emerging industries as samples from 2006 to 2012, the number of patent applications(using patent data until 2014), SPSS17.0 multiple linear regression equation to measure innovation performance. This paper is trying to explore items as follows.Firstly, the impact effect on enterprise innovation performance by implementing equity incentive to innovative talents including executives and key technical personnel, and whether this influence has lag effect. Secondly, the differences of validity of different equity incentive impact on innovation performance. Thirdly,which impact on innovation performance is better ? stock options or restricted stock? Fourthly, the different impact of equity incentive on innovation performance with the impacts of business nature and ownership concentration.The empirical results show that equity incentive can improve innovation performance, and this effect does not exist lag effect; long-term incentive are better than short-term incentive effect; restricted stock has a better impact on corporate innovation performance than stock option; private enterprise is better than the effect of state-owned enterprises; concentration of ownership would undermine equity incentive effect on innovation performance. According to the empirical results and reality, we recommend strategic emerging industries listed companies, especially state-owned enterprises should actively use equity incentives, increase the core technology backbone of incentives, extend the validity of the equity incentive, give priority to restricted stock incentive, put the technological innovation indicators into equity incentive evaluation system,create a good atmosphere of innovation to improve the incentive effects of equity incentive and get a better innovation performance.