Research On The Impact Of R&D Investment On Corporate Performance Of Manufacturing Listed Companies

In the era of knowledge economy,enterprises want to survive and gain a competitive advantage in the fierce competition,they must pay attention to knowledge and technology,R&D Investment is a prerequisite for enterprises to achieve technological innovation.Through R&D activities,enterprises can gain new knowledge and new technology which have monopoly in a certain period of time.They can improve the technological content of products or services and increase market share,thereby enhancing the enterprise business performance.Compared with the high yield,R&D activities have also high risk,long cycle and other characteristics,to protect their own interests,executives often choose to avoid risk investment decisions,rather than bear the risk of R&D activities.In order to solve the problem of inconsistency between executives and shareholders,it is necessary to provide reasonable and effective incentives for executives.There are two main ways of Executive Incentive——Executive shareholding and Executive short-term salary incentive.Executive shareholding which gives a portion of the shares to the executives can make them become the owner of the company and make decisions on the shareholder’s position.Executive short-term salary incentive which gives executives the economic compensation,can fully mobilize the enthusiasm of them and pay more attention to the long-term development of company.Manufacturing is the cornerstone of the country,occupying an important position in the national economy.Since the reform and opening up policy,China’s manufacturing industry attract a large number of global funds using low production factors and wide range of market resources,but with China’s population welfare and exchange rate advantage weakened,China’s manufacturing industry has many difficult in move forward because of the extensive manufacturing model,the scarcity of technical content and low value-added products.It is necessary to enhance the technological innovation capability of China’s manufacturing industry,and R&D investment is the source and power of technological innovation.This paper studies the relationship between executive incentive,R&D Investment and corporate performance in China’s manufacturing A-share listed companies,and uses the data of 726 listed companies disclosure R&D Investment and executive share in 2012-2015.And according to the nature of property rights,the sample enterprises will be divided into state-owned enterprises and non-state enterprises.This paper firstly studies the relationship between R&D Investment and corporate performance,executive incentive and R&D Investment in the overall sample,and then validates it in state-owned enterprises and non-state enterprises respectively.Then use the hierarchical regression to test whether executive incentives will have a regulatory effect on the relationship between R&D Investment and firm performance,and whether this regulatory effect will differ between state-owned and non-state-owned enterprises.The results of this paper show that:(1)R&D Investment is positively related to firm performance,and this correlation is more obvious in non-state enterprises.(2)Executive shareholding and Executive short-term.salary incentive are conducive to improving the R&D Investment,and the positive impact is more significant in non-state enterprises.(3)In state-owned enterprises,Executive shareholding and Executive short-term salary incentive have no effect on the relationship between R&D Investment and corporate performance.(4)In non-state-owned enterprises,Executive shareholding plays a negative role in the relationship between R&D Investment and corporate performance,and Executive short-term salary incentive pay a positive role in the relationship between R&D Investment and corporate performance.Finally,according to the empirical results of this paper,the author puts forward some policy suggestions on how to increase the R&D Investment and improve the performance of the enterprises from the perspective of executive incentive,and also points out the shortcomings of this paper and the future research.