Research On The Effects Of Equity Incentive And Equity Motivations On R&D Expenditure

The principal-agent problem between shareholders and managers has always been a hot research on corporate governance.After nearly half a century of development,equity incentive mechanism has been improved a lot in the United States,and had made an indelible impact on the prosperity of the stock market in the United States,and create a few stock market myths.However,equity incentive known as golden handcuffs cannot bring about high performance to the company all the time.Moreover,Some scholars have come to realize that the equity incentive mechanism also exists in a wide range of non-incentive elements with the exposure of such issues,like Enron fraud,expensive Yili shares executives equity incentive plans,and AIG executive whopping salary.As the crucial resource of enterprises,R&D expenditure can elevate corporate performance seriously from the following three aspects:enterprise output,productivity,and value.Then,what effects will equity incentive produce to enterprise's R&D investment activities?What adverse impacts will the existing non-motive elements produce to enterprise's R&D activities?According to the current situation of equity incentive and R&D expenditure in our country,this paper analyzes the actual effect the equity incentive will produce to R&D expenditure firstly,then try to further explore the effect the equity incentive will produce to the company R&D expenditure under different motivations basing on the principal-agent theory,management power theory and human capital theory.This paper is divided into five chapters for the research.The first chapter is an introduction.It introduces the overview of the paper from research background,research significance and other aspects,summarizes main points of domestic and foreign scholars,and points out the paper's research ideas,methods and innovations.The second chapter describes relevant concepts and theoretical basis.It summarizes relevant concepts of equity incentive and R&D expenditure and so on and elaborates relevant theories,including the principal-agent theory,management power theory and human capital theory,etc.The third chapter is the theoretical analysis and the research hypothesis.This part describes the status and existing problems of equity incentive and R&D expenditure of China's listed enterprises and analyzes the theoretical basis and influence path of the relevant research hypotheses and theoretical basis.The fourth chapter is the empirical research,in which through collection of sample data,selection of variable indexes and establishment of an empirical model,the listed enterprises on A shares of Shanghai Stock Exchange and Shenzhen Stock Exchange are selected as samples for descriptive statistics,correlation analysis and multiple regression analysis.The fifth chapter summarizes research conclusions,puts forward policy recommendations and points out the shortcomings of the research and future research directions of this paper.The research results show that:firstly,the equity incentive and shows inverted U curve relationship;then,contrary to non-incentive motivation,incentive motivation can significantly improve the level of R&D expenditure.There are some possible innovations of this paper:firstly,innovation about research perspective.Domestic and foreign scholars has obtained certain achievements with respect to the effect research of the equity incentive to R&D expenditure.However,existing research mainly centered on the single index or did some researches through distinguishing industry types,property rights types,equity incentive types.In the perspective of equity incentive motivation,this article attempts to study the influence of the equity incentive under two different kinds of motivations-inspirational motivation,non incentive motivation to the corporate R&D expenditure.Innovation about main research objects.Then,innovation about research contents.Basing on the principal-agent theory,theory of management power and human capital theory,this paper distinguishes the equity incentive motivation using the market model method.Combine the corporate R&D expenditure and its capital market performance organically.This paper investigate the influence of the equity incentive under two different kinds of incentive motivations to R&D expenditure respectively,and further develop the influence study of equity incentive to R&D expenditure.