An Research About Relationship Between Listed Companies' Characteristics Of Board Of Directors And R&D Input

With the advent of the information age,the speed of product upgrading is getting faster and faster.And countless companies are quickly eliminated due to lack of innovation,disappearing into the trend of times.More and more countries and enterprises realize that only by continuous innovation can they maintain the long-term vitality of the economy and enterprises.And they can maintain unique competitiveness in the ever-changing market to better meet the needs of customers with innovation.The state seeks reform in the direction of market system,policy mechanism and legal protection,and encourages more enterprises to carry out R&D and innovation activities through a series of measures,such as introducing more preferential tax policies,and also adopting legal channels such as protecting intellectual property rights.While the government,the market and other external factors actively seek change,enterprises as individual in the economy should also find ways to increase innovation and enhance their own strength from the perspective of corporate governance.As an important part of the corporate governance mechanism,the relationship between characteristics of the board of directors and R&D innovation deserves deeply studied.Based on principal-agent theory,information asymmetry theory and technological innovation theory,this paper intends to study how the board of directors as an important mechanism of corporate governance to affect the company's R&D innovation investment.Based on extensive reading of relevant literature,this paper chooses to measure the characteristics of the board of directors from two directions and three indicators: the two directions are the independence of the board and the behavior characteristics of the board.The independence of the board of directors is measured by the proportion of independent directors in the board of directors and the duality of head of the board of directors and CEO.The behavioral characteristics of the board of directors are measured by the number of board meetings.The independence of the board of directors is closely related to the effective performance of the board of directors in its supervision and decision-making functions.The board meeting is an important way for directors to exchange information,deepen communication,and play their own roles.By searching in CSMAR database and information website to collect A-share listed companies in Shanghai and Shenzhen stock exchanges from 2007 to 2016,basic financial data and R&D innovation data are used as research samples,and empirical analysis is used to study the relationship between the board characteristics and R&D innovation.Through regression analysis,it is found that:(1)There is a significantly positive correlation between the duality of head of board and CEO and the R&D investment,that is,the enterprises with same person as both head of board of directors and CEO tend to invest more in R&D innovation;(2)There is a significantly positive correlation between the number of meetings and the R&D investment of the enterprises,that is,the more times the board meeting is held,the more investment will the company make;(3)In the group of higher proportion of institutional investors,the relationship between the duality of head of board and CEO,the number of board meetings and the R&D innovation investment are still significantly positively correlated;while the in group of lower proportion of institutional investors,there is only a significant positive correlation between the number of board meetings and the R&D investment of enterprises;(4)In the group with high growth of the company,the relationship between the duality of head of board and CEO,the number of board meetings and the R&D innovation investment are still significantly positively correlated;in the group with lower growth of the company,there is only a significant positive correlation between the number of board meetings and the R&D investment of enterprises.It can be seen from the conclusion that this paper not only performs regression analysis on the overall data,but also divided the whole data into two groups according to proportion of institutional investors' shareholding and the growth of the enterprise,and carries out regression analysis on the data of different group for further research on the relationship between the two.Based on the empirical results,this paper puts forward some suggestions for the corporate governance mechanism:(1)China's current independent director system is far from the expectation of the initial introduction of the system.Enterprises should pay more attention to perfecting the existing independent director system,thereby improving corporate governance capabilities;(2)If an enterprise wants to increase investment in R&D innovation,it should let the same person be CEO and head of board of directors at the same time.This action can alleviate the information asymmetry existing between the board of directors and the senior management,thereby reducing the agency cost and strengthening corporate governance.Board of directors can make decisions that are conductive to the development of the enterprise,like increasing investment in R&D innovation;(3)The company should increase the times of board meeting to a certain extent,so that members of the board of directors can better understand the daily operation of the company,get together to make development decision for the company.This would help companies to invest more in R&D innovation.