Research On The Impact Of Stock Incentive On Corporate Innovation

Innovation is the primary driving force for development and the strategic support for building a modernized economic system.The report of the 19 th CPC National Congress mentioned innovation more than 50 times,which has ignited a strong clarion call to accelerate the construction of innovative countries.Numerous literatures show that enterprises are the main body of scientific and technological innovation,and their innovation behavior is not only an important source of their own advantages,but also a key factor to drive a country's economic growth and enhance its international competitive strength.Exploring scientific and effective incentive mechanism to encourage enterprises to carry out technological innovation is an important issue to be studied and solved under the new normal of China's economy.Based on the influence of internal incentive on enterprise innovation activities,this paper studies the influence of stock incentives on enterprise innovation investment and innovation efficiency.Using data of listed companies from 2006 to 2016,this paper adopts PSM-DID method to investigate the influence of stock incentives on company innovation from multiple perspectives.Innovation input is measured by R&D input,and innovation output is measured by the number of patent applications.Stock option and restricted stock are the two main ways of stock incentives,and there are obvious differences in risk bearing mechanism,symmetry of power and obligation,symmetry of incentive and punishment between them.As the most common stock incentive targets,senior executives and core stuffs play different roles in innovation activities.After the confirmation study of the positive effects of stock incentive,this paper further investigates the incentive effect of different targets and different modes on R&D input,patent output and innovation efficiency.CEO-incentive of stock option has positive effects on R&D,while core-stuff-incentive of restricted stock mainly affects patents.At the same time,stock options on both CEO and core stuffs can significantly improve innovation efficiency,although incentive on core stuff showing better results.The results of differentiate study of incentive missions,modes and targets of this paper answers the question of optimal incentive methods of which company should consider while making incentive policy.This paper emphasizes the importance of core employees in improving innovation efficiency,which helps to encourage enterprises to pay attention to core employees and give full play to the role of innovative talents.