Stock Incentive Plan And Innovation

Since the reform and opening up,China's economy experienced 30 years rapid development and had achievements attracting the worldwide attentions.The comprehensive national strength and peoples' living standard had been greatly improved significantly,but the rapid development also brought many realistic problems.China's economic development meets bottleneck,such as the gradual depletion of natural resources,the deterioration of the ecological environment,the arrival of the aging of the population,the rising local debt.Changing the ways of economic development,Increasing the investment in innovation,driving from the elements and investment to innovation,is the connotaion of the "new normal".Enterprises are cells of national economy.China's economic development depends on the technological innovation of Chinese enterprises.Technological innovation is an important embodiment of enterprises' core competitiveness and the soul of enterprise development.However,the inputs of technological innovation have many characteristics,such as large amount of investment,long investment period,slow investment effect,high uncertainty of return and so on.Decision makers are generally difficult to make decisions on technological innovation inputs,with inter-temporal selection problem of long-term or short-term performance.The managers' short-sighted behaviors and people prefer to the immediately outcome constraint the enthusiasm of the enterprise.Therefore,it is needed to design a set of reasonable mechanism to encourage decision makers to do technological innovation inputs,focus on the strategy of the enterprise development and change the short-term performance to long-term development.Equity incentive can play such a role.Equity incentive theory agrees that granting the equity to operators enables the operators to become shareholders,so as to improve the operatiors short-term behaviours in some ways.Based on the theory,this paper tries to check wether the equity incentive can improve the managers' short-term behaviours from the perspective of technological innovation inputs and outputs.So we can increase the technological innovation inputs and outputs,and improve the firm long-term development.This paper researches the impact of equity incentive on enterprise's technological innovation based on the OLS regression and Tobit model,choosing 941 high tech companies listed on Shenzhen GEM and SME board in 2006-2013 as study sample,excluding the financial company,ST company,*ST company and the samples of missing data.Based on the enterprise technological innovation process,the enterprise technological innovation is divided into two aspects of technological innovation inputs and technological innovation outputs.This paper references existing literatues,and takes the ratio of R&D inputs to total assets as technological innovation inputs index,and takes the number of patents accepted as technological innovation outputs index to analysis the impact of the implementation of equity incentive,the intensity of equity incentive,the type of equity incentive and the period of equity incentive on technological innovation inputs.As the core technical personnel of the enterprise are the frontline staff of technological innovation.They directly participate in the process of technological innovation,and have a significant impact on the technological innovation outputs.Therefore,this paper further studies the impact of the implementation of incentive and its incentive intensity including the core technical personnel on the technological innovation outputs.There are several conclusions:(1)No matter how the scale of the enterprise is,the implementation of equity incentive has a significant positive effect on enterprise's technological innovation inputs.However,the implementation of equity incentive and small enterprise's technological innovation outputs are positively correlated,and has no significant correlation relationship with large enterprise's technological innovation outputs.(2)There is no significant correlation relationship between the implementation of restricted equity incentive and technological innovation inputs,as well as technological innovation outputs.The implementation of equity incentive promotes small enterprise's technological innovation inputs,but the impact on technological innovation outputs is not significant.(3)Extending the validity of equity incentive can promote the enterprise's technological innovation inputs.The validity of equity incentive has a significant positive correlation relationship with small enterprise's technological innovation outputs,and has a nonsignificant positive correlation relationship with large enterprise's technological innovation outputs.(4)Increasing the strength of equity incentive promotes the enterprise's technological innovation inputs significantly,and has a significant positive effect on small enterprise's technological innovation outputs,and has a nonsignificant impact on large enterprise's technological innovation outputs.(5)The implementation of equity incentive to core technical personnel can significantly promote small enterprise's technological innovation outputs,but the impact to small enterprise is not significant.Increasing the incentive intensity to core technical personnel improves the small enterprise's technological innovation outputs,and the impact on large enterprise is not significant.The results of this paper provide the evidence that the high technology enterprise can design and implement equity incentive to increase the technology innovation inputs and outputs.And it can also provide support that regulators strengten and expand the implementation of equity incentive.