Research On The Impact Of Executives' Shareholdings On R&D Investment

The separation of ownership and management rights is a basic feature of modern enterprises,and it also leads to the problem of principal-agent.Therefore,more and more enterprises adopt executive shareholding to hold the interests of the executives and the shareholders,thus reducing the agency problem.R&D investment is critical to improving core competencies and corporate value.However,R&D investment decisions are influenced by the agency costs of managers.Then,whether the executive shareholding as a mitigating agency problem can have a positive effect on R&D investment has become a widespread concern of academics,regulators,and companies.The firm life cycle theory believes that there are significant differences in the organizational structure,governance mechanism,employee innovation spirit,and financial characteristics of enterprises at different stages.Therefore,relevant research at the enterprise level should also be changed from a static perspective to a dynamic perspective.The role of executive shareholding will also change as the life cycle of the business evolves.The private economy is an important part of China's economic reform,and its R&D and innovation capabilities are of great significance to the industrial upgrading of the Chinese economy.Therefore,this paper will study the relationship between executive ownership and R&D investment of private manufacturing enterprises from the perspective of firm life cycle theory.This study uses Dickinson's cash net flow combination method to divide the life cycle of the company.Taking the 2015-2017 Shanghai and Shenzhen A-share private manufacturing listed companies as a sample,this paper discusses the impact of executive shareholding on R&D investment and considers the different business life cycles,relations between the two at whether differences.Finally,further distinguish between high-tech industries and non-high-tech industries.On this basis,it discusses the relationship between executives' holdings in high-tech industries and non-high-tech industries and corporate R&D investment under different life cycles.The study found that,in general,executives' holdings will encourage companies to invest in R&D investment.However,when companies are at different stages,executives' shareholdings have different positive effects on R&D investment.In the growth period,the shareholding of executives is positively related to R&D investment,but it is not significant.In the mature enterprises,the executives of have a significant positive effect on R&D investment.Compared with the maturity period,the executives' holdings in the recession period will promote the R&D investment more strongly.The R&D investment is playing a more positive role,that is,as the life cycle of the enterprise is advanced by the growth period,maturity,and recession,the positive impact of executive shareholding on R&D investment is enhanced.Compared with non-high-tech industry,hightech industry executives have a positive impact on R&D investment;and when enterprises are high-tech enterprises,executives' shareholdings have a significant role in promoting R&D investment in growing companies.Therefore,when enterprises use the executive shareholding policy to encourage enterprise innovation,they need to consider the life cycle characteristics of the enterprise.According to the dynamic development of the enterprise,an efficient and flexible executive stock management mechanism should be established to adjust the shareholding ratio of senior executives in a timely manner.In this way,we will promote innovation and extend the development cycle of the company.