Equity Incentive And Innovation Strategy Choice

Family firms are important parts of the national economy and play important role in stabilizing employment and promoting national economic development.But at the same time,in the face of international trade protectionism and domestic consumption upgrades,transformation upgrades are especially necessary to those family firms that rely mainly on low-wage costs,low-end positions in the industrial chain,and lack of core technologies and independent brands.innovation is the only way if family firms need to be transformed and upgraded.Dual innovation is an important part of the firms innovation strategy,which is divided into explorative innovation and exploitative innovation.Explorative innovation refers to the innovative activities that firms use new knowledge and technology or enter new markets.exploitative innovation is that the firm make full use of existing knowledge or the effective development of existing resources and capabilities.Therefore,this paper identifies the research theme as dual innovation strategy for family firms.This paper reviews the research on the effect of family firms innovation and the research on dual innovation,and finds that there are gaps and deficiencies in the research on dual innovation of family firms.Combined with the background and research of Chinese equity incentive implementation,we again focus the research on the exploration of family firms equity incentives and dual innovation strategies.Then,for the family firm equity incentives and dual innovation,using the news and company announcements data,we conducted the Derun electronic case study,and analyzed the relationship between equity incentives and dual innovation.Furthermore,based on agency theory and social-emotional wealth theory,combined with predecessor research and qualitative research,the four hypotheses of this paper are proposed.Finally,using data of family firms patent application data and equity incentive,the hypothesis of this paper is empirically studied.The empirical results of this paper show that equity incentives are related to the dual innovation strategy of family firms.Stock options will enhance the company's explorative innovation and reduce the company's exploitative innovation;restrictive stocks equity incentives will improve the company's exploitative innovations and reduce the company's explorative innovation;Family control is positively regulating the relationship between stock options and exploitative innovation;family control is positively regulating the relationship between restricted stocks and explorative innovation,and negatively regulating the relationship between restricted stocks and exploitative innovations.