Executive Equity Incentive And Corporate Innovation

The China Securities Regulatory Commission announced the stock incentive management (draft for soliciting opinions) in late December 2015, aimed at allying capital owners and the workers'common interests, improving core competitiveness of enterprises. Now the stock option incentive system can effectively solve the principal-agent problem, reduce agency costs in the field is still controversial.This paper is in the perspective of enterprise innovation, find how to make executives devote to through options, allying their business behavior with long-term benefits to the enterprise, and also attempts to answer what factors will affect the role of equity incentives for research and innovation. Author based on PSM approach overcomes ample selection bias in the study selection. Using data from 2009-2013 all A-share listed companies in China, explore the role of equity incentive.Author obtained following conclusion:(1) equity incentive can effectively promote enterprise development innovation input, sample who has equity incentive spending more on R&D investment by 20%, more on R&D intensity by 25%; (2) equity incentive also can effectively promote innovation output, and focus on more advanced innovation; (3)Options'effect on R&D investment is more strong, Restricted stock is the stronger incentives for innovation outputs (4) non-State-owned enterprises will upgrade the Enterprise Innovation ability of better; (5) Managerial power will restrain incentive effect. Finally, according to article, author suggest we should improve corporate governance, and encourage qualified companies to actively participate in the plan, increasing the core competitiveness of enterprises.