Executive Compensation Gapand The Innovation

In the era of knowledge economy,innovation is an important strategic support for the sustainable development of enterprises,and innovation is crucial to the core competitiveness of enterprises and long-term economic growth.With the intense competition in the market and technological changes,research and development have become an important part of the company's business.It is an important way for companies to gain competitive advantage and enhance their core competence.Human capital is the source of corporate R&D output.At the same time,in recent years,the issue of pay gap has been paid much attention by scholars at home and abroad,because the pay design is related to the incentive effect of the company's management,thus affecting the management decision-making and business performance.However,how does the internal income gap affect the innovation of the company?There is little research on this issue.Based on the above background,considering that the company's R&D innovation behavior has obvious industry characteristics,high-tech enterprises have far more innovation efficiency and growth speed than other types of companies.Therefore,the paper uses the data of A-share high-tech listed companies from 2008 to 2015 as a sample,and uses regression analysis to examine the influence the top management team pay gap and top management-employee pay gap on the company's innovation,and it's internal influence mechanisms.At the same time,we introduce management power factors to analyze its regulatory role in the relationship between executive pay gap and innovation.The innovative points of this paper's research are reflected in three aspects:First,from the perspective of R&D output efficiency,this paper further demonstrates the relationship between executive pay gap and R&D output from a more microscopic perspective,and provides more powerful research conclusions.Secondly,this paper selects high-tech companies with stronger R&D and innovation.At the same time,considering the impact of management power factors,the impact of executive pay gaps on R&D output will be studied,and the analysis conclusions of the two relationships will be more persuasive.Third,this paper separates the innovative effects of executive compensation and employee compensation,and analyzes the internal impact mechanism of the compensation gap.Study found that:among the high-tech companies,first,the top management team pay gap and the top management-employee pay gap have a positive effect on the innovation of enterprises.Second,the positive incentive effect of the pay gap on R&D output is mainly driven by the executive compensation premium.The employee compensation premium,on the contrary,reduces the output of innovation to some extent.Third,the existence of management power inhibits the positive incentive effect of executive pay gaps on innovation output.The specific structure of this paper is as follows:The first part is an introduction.This section elaborates the research background,research significance,research content and research framework of the paper;finally it proposes possible innovations.The second part is literature review.Firstly,this section reviews relevant literature based on the economic consequences of executive pay gaps.Then it reviews relevant literature on the connection of executive incentives between R&D activities,and the influence of management power on executive compensation.And,it sorts relevant literature on the connection of executive pay gaps between R&D activities.Finally,it makes a review of all literatures.The third part is the theoretical basis and research hypothesis.This section defines major concepts such as top management,executive pay gap,management power,and innovation output;then it mainly introduces the principal agent theory,tournament theory,behavior theory,and management power theory.Then,on the basis of the above theories,this part will include theoretical analysis and the deduction of hypothesis.The fourth part is study design.First,this section defines the data sources and sample selection criteria.Then,it analyzes and measures the key variables of this paper,and sets the control variables.Finally,the regression model is built to verify the hypotheses proposed in the third section.The fifth part is empirical analysis.In this part,the descriptive statistical analysis,the correlation analysis and the multiple regression analysis are carried out respectively.The robustness test is carried out on the research hypothesis.The sixth part is research conclusions and policy recommendations.This part comes to the conclusion of the study on the basis of the results and gives the policy recommendation.Finally,this section will point out the deficiencies of this study and the direction of future development.