The Research Of Relations Among CEO's Tenure?Equity Incentives And R&D Investment

Enterprises are main bodies to build an innovative country,Research and Development investment(R&D)is a key link to realize enterprise independent innovation.Driving factors of R&D investment are numerous,the microcosmic perspective,represented by the CEO of company executives is characterized by academic research hotspot in recent years.Based on the theory of high ladder,with CEO these two terms as the breakthrough point,the paper first explore the relationship between CEO tenure and the intensity of R&D investment.Then based on the principal-agent theory and incentive theory analysis,because of the equity incentive system can make the interests of managers and owners tend to be consistent and reduce agency cost,add the equity incentive as regulating variable,this paper studies the equity incentive in the relationship between CEO tenure and R&D investment.Finally,this paper makes further comparison of equity incentive stock options and restricted stock form of adjustment.The innovation of this paper is:1.Innovation of research perspective.Most of existing researches focused on CEO tenure and R&D investment,equity incentive and the relationship between R&D investment,less pay attention to the relations among these three ones,and they usually only study the direct effect of equity incentive to invest in R&D.This paper will discuss equity incentive system which played a regulatory role between CEO tenure and R&D investment.2.Content innovation.First,this paper examines the impact of both CEO's current tenure and the expectation of his departure on R&D investment.Previous studies of the tenure of CEO have focused on the former CEO's absence,which ignored the impact of the CEO's expected retirement years on corporate R&D investment.Second,based on the research of equity incentive,through the way of grouping study,further compares the different role which equity incentive stock options and restricted stock played between CEO tenures and R&D investment,the paper gives more detailed research.This paper choose listed companies in Shanghai and Shenzhen Stock Markets in 2011-2015.A total of 5372 samples of listed companies in 16 industries,the empirical research conclusions are as follows:1.Other things being equal,the companies R&D investment intensity increase with the increase of the existing tenure of CEO,and reduce with the expectation of the CEO's departure.2.Equity incentives strengthen the positive relationships between the CEO's current tenure and R&D investment,and alleviating the negative relationships between the CEO's departure expectation and R&D investment.3.Different equity incentives play different regulation effect:As to the positive relationship between CEO tenure and existing R&D investment,stock options give play to the role of significant positive adjustment,and the restricted stock adjustment effect is not so obvious;Stock options play a significant mitigating role in the negative relationship between the CEO's departure expectations and R&D investments,while restricted stocks further aggravate the negative relationship.Finally,it puts forward policy suggestions to relevant departments and enterprises.