The Influence Of SOE Executives' Political Promotion Incentive On Enterprise Innovation

The researches on the incentive mechanism of corporate managers is mainly include focused on the explicit incentive research represented by salary incentives and equity incentives,and implicit incentive research based on on-the-job consumption,position promotion,and reputation.However,compared with non-state-owned enterprises,due to the differences in economic system and political background,the governance problems of state-owned enterprises shows uniqueness.On the one hand,�The Guidance Opinions on Further Regulating the Salary Management of Central Enterprises Executives� in 2009 has linked executive compensation with the average salaries.This reflects the design concept of unification of incentives and constraints,but also reflects the spirit of limiting executive compensation,to some extent,it weakens the incentive effect of compensation incentives for senior executives in the market competition.On the other hand,state-owned enterprises have many administrative restrictions on owners and senior executives,and industries may also involve resource monopolies.Equity incentives are more cautious from content to operation,so the incentive effect of equity incentives on SOE executives is also greatly reduced.Under the background of limited salary and imperfect equity incentive,the utility of encourage means under the identity characteristics of the professional manager of SOE has weakened.However,SOE executives are not typical managers.The mutual transfer between state-owned enterprises and government officials and the direct appointment of SOE executives by the organizational department makes SOE executives to pursue official career development in their careers.Political promotion incentive plays an important role in the executive incentives of state-owned enterprises.Therefore,it is necessary to study the influence of political promotion incentives on the innovation activities of state-owned enterprises from the dual identity characteristics of managers and officers.This paper studies the influence of political promotion incentive on innovation input,innovation output and innovation efficiency as well as the moderating effect of salary incentive and marketization process on this effect,by using promotion data and innovation data of state-owned listed companies during 2007-2015 in China.The results show that,SOE executives' political promotion negatively affects the investment in enterprise innovation,and positively affects the innovation output and innovation efficiency.At the same time,the effectiveness of SOE executives' political promotion incentives for corporate innovation activities differs between central SOEs and local SOEs.Salary incentive and marketization process play a moderating role in the impact of SOE executives' political promotion on enterprise innovation.It weakens the negative influence of SOE executives' political promotion on enterprise innovation investment and strengthens the positive influence of SOE executives' political promotion on innovation output and innovation efficiency.This study explains the influence mechanism of state-owned enterprises innovation activities from the perspective of political promotion incentive.It provides empirical evidence for the innovation decision of state-owned enterprise executives under the influence of political promotion incentive,as well as how the synergy of different incentive methods and different market environment affect this relationship.It has certain guiding significance to optimize the evaluation system of state-owned enterprises.