Executive Equity Incentive,R&D Investment And Corporate Performance

With the rapid development of the economy and continuous technological advancement,the company's own reforms and innovative R&D activities have become the internal driving force for sustainable development of the company.If the enterprise is blindly complacent and self-styled,if it does not change or innovate,it will be difficult to surpass the opponent's initiative to gain development in an increasingly fierce market competition.At the same time,the state is encouraging independent innovation.The party's report on the Nineteenth Congress mentioned science and technology more than50 times and emphasized innovation.Therefore,companies should vigorously increase the investment in manpower and capital related to R&D to carry out scientific and technological innovations so as to enhance their own innovation and R&D capabilities and enhance their core competitiveness.However,under the modern enterprise system,there is a common problem of separation of ownership and management rights.Corporate shareholders tend to achieve the long-term development of the company through the related R&D investment to improve innovation capabilities.The company's managers who act as agents will circumvent R&D activities due to the high investment,long-term cycle,and high risk of innovation activities,thus damaging the company's long-term interests.For long-term equity incentives for managers of enterprises,allowing managers to have the identity of the company's shareholders at the same time can reduce the agency costs of the company to a certain extent,realize the convergence of the interest functions of shareholders and managers,and ultimately enable the long-term development goals of the company to be realized.As the GEM market is based on independent innovation companies,it provides a constant source of innovation.The GEM companies are the most innovative potential groups in the Chinese economy.This article takes the listed companies of China Growth Enterprise Market from 2014 to 2016 as the research object.At the same time,due to the lag in R&D investment,we choose to lag one phase of R&D investment data.Through combing and theoretical analysis of domestic and foreign literatures,three research hypotheses are proposed and a regression model is established to try to study the internal relationship among executive equity incentives,R&D investment and corporate performance.Through the study of this paper,we can find that there is a significant positive relationship between executive incentives and corporate performance in China's GEM listed companies;There is a significant positive relationship between executive equity incentives and corporate R&D investment;R & D investment mediates the relationship between managerial ownership and firm performance.Giving corporate executives appropriate stock incentives can help increase the enthusiasm and creativity of managers in participating in the work,thereby achieving the convergence of managerial and shareholder interest functions,which in turn allows managers to consider more of the research and development activities that benefit the company's long-term development,and increase investment in R&D activities,ultimately achieve corporate performance improvement.