The Effects Of The Board Capital And CEO Characteristics On R&D Input

Innovation motivates the development of the whole country,and the promotion of innovation originates from the research and development input.Chinese R&D input is increasing these years,but it is still lower than the R&D intensity of developed countries.The number of small and medium companies(SMEs)takes up more than 90%of the number of total corporations,and they become more and more critical.Improving the innovative capacity is important to the growth of SMEs.However,lacking resource restricts the R&D activities of SMEs.Corporate governance is the foundation of corporation innovative system.Board of directors and CEO are determinate to the R&D investment.The resource brought by directors and CEO's characteristics may have an effect on the level of R&D input in SMEs.Additionally,in cities of different developing level,there remains differences among external environment and governmental influence,which will affect the corporate governance level and the relationship between directors and CEO,and finally the R&D decisions will be influenced.This paper thinks that building a good relationship between board of directors and CEO is beneficial to the increase of R&D input.According to the Knowledge-based View,the Resource Dependence Theory and Upper Echelon Theory,this paper studies the effects of board capital and CEO characteristics on R&D input about listed companies on SME board from 2010 to 2014.The results indicate that board human capital and social capital,CEO education and governmental background are supportive to R&D input.Additionally,the interaction between CEO's high educational level and board capital motivates the R&D expenditure,and the effect is more obvious in less developed cities.The interaction between CEO's governmental background and board human capital has adverse effect on R&D,which is more severe in less developed cities.The interaction between CEO's governmental background and board social capital has positive effect on R&D,which is more significant in developed cities.This paper emphasizes the interaction between board capital and CEO characteristics,and deepens the research on corporate governance and R&D investment through differentiating regional developing degree.This paper emphasizes the interaction between board capital and CEO characteristics,and deepens the research on corporate governance and R&D investment through differentiating regional developing degree.Besides,the paper gives some advice on SMEs' development and corporate governance,as well as governmental work.