Innovation Culture,Option Incentive And R&D Investment

In 21st century when knowledge-based economy has been developing rapidly,with global competition becoming more and more fierce,how to get sustainable advantage is a concerning for enterprises.Many researches indicate that adequate R&D(Research&Development)is the source and power for enterprises to get core competence and realize sustainable developing target.As a kind of informal institution,culture is a type of special belief and value rooting in organization which can play a strong motivating role and provide a common code of conduct,thus influence enterprises' behavior and performance.Proper culture is beneficial for company to make a scientific decision and ensure sustainable and healthy development of the enterprises.Moreover,under the background of "public entrepreneurship and innovation",innovation has become important element for macro economy and micro entity's development,and lots of companies begin to advocate innovation culture.With above,exploring whether innovation culture can promote enterprise's R&D has theoretical significance and practical value.Besides,what relationship is there between innovation culture(an informal institution)and formal institution of company in promoting R&D?in order to answer this question,we bring in "option incentive"(a type of formal institution).linking managers' wage to enterprise's long-term performance alleviates the problem that managers tend to increase short-term performance for the pursuit of personal maximum interests and encourages managers to make decisions that meet the requirements of the enterprise long-term goals.It is a noteworthy issue whether option incentive plan can promote enterprises'R&D,and the relationship between innovation culture(an informal institution)and option incentive(a formal institution)in promoting R&D is significant to enrich the research of relationship between formal and informal institution in company's decision.Using the data of listed company in China during 2009-2015 to investigate:(1)different from most previous studies,by manually collecting(company website,annual reports and other public channels)all listed companies' clear corporate culture in China one by one with the method of text analysis,to identify whether it contains innovation culture.And then we explore whether the innovation culture of the enterprise itself advocates to promote R&D.(2)by manually collecting all listed companies,annual report in China,we get the data whether company implements option incentive plan or not,and then investigate whether option incentive influence R&D.(3)bringing in the interaction term of innovation culture and option incentive,we examine the relationship between innovation culture(an informal institution)and option incentive(a formal institution)in promoting R&D.Conclusions are as follows:(1)innovation culture can promote R&D investment;(2)companies that implement option incentive plan have more R&D investment;(3)innovation culture and option incentive play a synergetic effect on R&D investment.Contributions of this essay are as follow:(1)by manually collecting data,this paper examines whether innovation culture can promote companies to make R&D investment;(2)from the view of innovation culture,we verify that corporate culture and option incentive play a synergetic effect on R&D investment;(3)Under the background of building innovative society,through empirical evidence of innovation culture's positive effect on enterprises' R&D investment,which can provide theory basis for government department and enterprises themselves constructing innovative culture.