Senior Executive Incentives,Team Characteristics And R&D Investment

Innovation is the eternal theme of enterprises' development.Only through continuous innovation can enterprises form the core advantages and find a foothold in the fierce competition.From this perspective,innovation is in the long-term interest of the enterprises.However,in modern enterprises,the decision-making power of innovation strategy is in the hands of the senior management team.The general separation of management and ownership has a negative impact on the R&D investment.Based on the agency theory,this paper discussed whether the equity and compensation incentives to senior executives has significantly improved the level of R&D investment.Based on the higher order theory,we discussed the moderating effect of team characteristics between executive motivation and R&D investment.In view of the particularity of state-owned enterprises in China,we distinguished between state-owned and non-state-owned groups and explored the moderating effect of property rights on the whole incentive process.Through the regression analysis of the data of listed A-share companies from 2012 to 2016,the following conclusions are obtained.Both equity incentive and compensation incentive can significantly improve the level of R&D investment.Equity incentive is more powerful in state-owned companies,and compensation incentive is more powerful in non-state-owned companies.As for the team characteristics,the share ratio of female senior executives regulates the incentive function of equity in the total sample and non-state-owned enterprises.Term heterogeneity has negative effects on equity incentives in the total sample and non-state-owned enterprises.The average age of senior executives has negative effects on compensation incentives in the total sample and SOE sample.Therefore,this paper proposes to reduce the agency cost of enterprises by promoting the incentive of executive stock ownership and designing a reasonable compensation system,so as to make managers pay attention to the long-term innovation performance of enterprises.In the process of incentive mechanism design,the matching of incentives and team characteristics is considered in order to make the promotion of enterprise innovation better.