The Impact Of Executive Shareholding On Enterprise’s Investment In Innovation

Under the background of the continuous development and improvement of China’s Growth Enterprise Market and the New Third Board,R&D investment has become a key factor affecting the competitiveness of enterprises.Correspondingly,companies are increasingly investing in research and development.According to the National Science and Technology Funds Investment Statistics Bulletin,China’s R&D investment in 2017 reached 176.61 billion yuan,a year-on-year increase of 12.3%,and the growth rate increased by 1.7%,indicating that China’s investment in research and development funds has increased year by year and the growth rate has accelerated year by year.Through combing the relevant research literature at home and abroad,it is found that the enterprise’s innovation investment is affected by internal factors such as the demographic characteristics of the executives,the corporate governance structure,and external factors such as policies and laws.However,the previous scholars’ relationship between the two is only a simple study on data.In practice,after the executives hold shares,they will pay more attention to the growth of the company and increase the investment of the company.This paper selects the incentive factors of executive shareholding in one of the core contents of corporate governance,and conducts an empirical study on the impact of executive shareholding on corporate innovation investment.On this basis,in order to further verify the mechanism of executive shareholding ownership on corporate innovation investment,this paper explores the Decision Theory proposed by Simon in 1947.In 1958,Simon and March proposed that executive attention is a key point in making decisions.Subsequently,in 1997 Ocasio proposed the “Attention Based View”,that is,what decisions the executive team made depend on what kind of information they placed their attention on.This paper believes that the key to determining the decision-making behavior of enterprises is how executives can allocate their limited attention to innovation.That is,innovation attention can be used as the main variable to explain the internal mechanism of executive shareholding ownership impact on innovation investment.A new perspective for bold exploration.Therefore,based on the existing literature,this paper takes the GEM listed companies as the research object,adopts the empirical research method,and considers the intermediary role of innovative attention,and explores the internal mechanism of executive shareholding and enterprise innovation.Through the analysis and analysis of relevant theories and the generalization of the existing domestic and foreign journal articles,the research hypothesis of this paper is proposed.Hypothesis 1,executive shareholding has a positive effect on corporate innovation investment;hypothesis 2,executive shareholding has a positive effect on the allocation of innovative attention;Hypothesis 3,innovative attention is positively related to the enterprise’s innovation investment;Hypothesis 4,innovative attention plays a mediating role between the executive shareholding and the enterprise’s innovation investment.Companies selected to be listed on the GEM in 2009 and survived to date were selected as research objects,and data were collected from the time span of 2013-2017.The method of mediating effect was studied by Baron and other scholars to construct a multivariate regression model.Use the literature method and questionnaire to determine the keywords that can measure attention,and then use the qualitative software Nvivo11.0 to count the word frequency of the keywords to represent the size of attention.The empirical results of this paper are mainly as follows:(1)The relationship between executive shareholding and innovation investment is positive and significant;(2)The relationship between the two is realized through mediation variables,namely,innovative attention.In other words,executive shareholding first affect the degree of senior management’s allocation of innovative attention and thus contribute to corporate innovation investment.From the main effect of the model,executive shareholding as an important factor can significantly affect innovation investment.It shows that the executive ownership of enterprises in the Chinese context has its positive side.Executives shareholding as a long-term incentive mechanism for enterprises can encourage executives to pay attention to innovation strategies and business decision-making,and increase investment in innovation.From the perspective of model mediation effect,according to theoretical analysis and empirical results,innovation attention can play a mediating role between executive shareholding and innovation investment,that is,executive shareholding takes the lead in influencing the senior innovative attention and affects enterprises.Based on the empirical results and combined with China’s specific national conditions,policy recommendations were proposed from both the enterprise and government levels.At the enterprise level,it is recommended that enterprises actively adopt executive shareholding plans and actively focus on innovation activities.Such as the introduction of new technologies,update equipment,etc.;At the government level,it is recommended to improve the institutional environment for implementing equity incentives,and fully regulate the relevant systems such as corporate executives holding shares or reducing holding.