Financial Slack,Executives With CPA Background And Firm R&D Investments

In the critical period of China's economic transition,R&D has got the government and enterprises of their own unprecedented attention.The innovation activity has the characteristics of big investment,inter-temporal and output uncertainty.In the long run,however,it plays an important role in cultivating the core competitiveness of enterprises and playing a competitive advantage in the market.How to shift from low-efficiency growth,which is highly dependent on resource consumption,to intensive growth mode dominated by technological progress and technological innovation,is a major problem to be solved urgently for policy making and enterprise sustainable development.R&D investment is an important investment activity in enterprises' innovation activities,which is crucial to the cultivation of independent innovation ability.However,the high risk attributes of R & D restrict the enthusiasm of many enterprises.Therefore to provide a better reference for the decision-making level is of great significance.This paper includes the background of executive CPA and financial redundancy at the same time in the research of R&D activities,not only from the current objective environment of corporate financial resources for an analysis,but also from the subjective decision-making level on the whole team,and further in-depth study of the interaction of the two factors on the micro-mechanism of R&D investment decisions.Using the sample of A-share listed companies in China from 2007 to 2015,this paper investigated the relationship between executive with CPA background and corporate R&D investment decision-making and the mechanism of financial slack on the relationship between the two variables.The results show that the risk-averse personality profile of the executive CPA context reduces investment in innovation activities,but financial redundancies provide favorable conditions for R&D,as well as a less conservative attitude toward R & D spending by CPA executives.Specifically,risk aversion from executives of the CPA background,both in high-growth and low-growth businesses,significantly reduces the level of R & D spending,compared to the provision of financial support for innovation activities If CPA background of the executives in the enterprise faces sufficient financial redundancy,risk aversion personality traits of them are diluted.But the financial redundancy of resources on the top management of high-tech enterprises in the R&D projects,that is,the mitigation on the negative correlation between the CPA context and the firm's R&D investment decisions is only played by and reflected in low-growth companies that do not exist in high-growth companies,because they have more investment opportunities and are facing Higher uncertainty,CPA background executives are still less risk-conscious with R&D activities based on less uncertainty.At the micro level,the research on the influencing factors of R&D of enterprises is of theoretical significance.Macroscopically,it provides a reference for the senior management of enterprises to adjust and perfect the market policy which encourages R&D and innovation,and has certain practical significance.