Research On The Incentive Effect Of Internal Pay Gap On Enterprise Innovation Under The Background Of Pay Limitation Order

In recent years,the pay gap between senior executives and ordinary employees has been heated by the public.At present,the research on how the pay gap affects the value and behavior of enterprises mainly focuses on its economic consequences,while there are few articles on how the pay gap within enterprises affects innovation.Innovation is very important for the long-term development of the country and enterprises.It has always been a matter of close concern to the Central Committee of the Party and the only way for the country to prosper and prosper.However,from the actual situation of enterprises,the ability of independent innovation is seriously inadequate,and innovation investment is in a low state,which is not conducive to the development of enterprises,and will have a negative impact on the healthy development of market economy.Enterprise innovation depends on the joint efforts of all employees.In order to fully mobilize the innovation enthusiasm of the team,enterprises need to establish an effective incentive mechanism to encourage the team to work together for enterprise innovation,and a reasonable salary gap can fully mobilize the efficiency and enthusiasm of the team.Therefore,in order to maximize the mobilization of management.The motivation of management and employees should be encouraged to participate in innovation activities and promote innovation.Therefore,in order to strengthen the salary management of the head of state-owned enterprises and establish and improve the incentive and restraint mechanism of the income distribution of the head of enterprises.In 2009,the State Council issued the Guiding Opinions on Further Standardizing the Compensation Management of Leaders of Central Enterprises(hereinafter referred to as the Limitation Order)to rectify the situation.In 2014,the Central Government issued the Opinions on Deepening the Reform of Compensation System for Leaders of Central Management Enterprises,which adjusted the upper limit of the pay gap between senior executives and employees of state-owned enterprises to eight times.The two government salary restriction orders focus on the executives of the central enterprises(other state-owned enterprises refer to executives),the main way is to link the salary of executives with the average salary of employees,in order to adjust the salary gap within enterprises.Whether the salary restriction order will affect the incentive effect of the pay gap has naturally aroused widespread concern in academic circles.How to design the pay gap in order to achieve the optimal incentive effect,as well as the impact of the pay limit order on the relationship between the two,this is the issue that this paper wants to study.This paper will analyze the incentive effect of salary gap under the background of the salary restriction order in 2014 as an exogenous policy shock.The main innovations of this paper are as follows: firstly,the incentive effect of internal pay gap on enterprise innovation is studied under the background of government pay restriction order;secondly,the adjustment effect of industry heterogeneity analysis and corporate governance level is added;thirdly,the double difference method is used to analyze the effect of pay restriction order on pay gap,which makes the results more explanatory.The main conclusions of this paper are as follows: First,generally speaking,the salary restriction order has basically achieved the effect of salary intervention,and the salary gap within the enterprise is affected,but it has not achieved the expected effect for the central enterprise.Secondly,there is an inverted U-shaped relationship between the internal pay gap and R&D investment,which is consistent with the assumptions.Thirdly,the salary restriction order has no significant impact on the relationship between the salary gap and innovation investment,so the introduction of the salary restriction order has no impact on the positive incentive effect of the salary gap.Fourthly,after adding the interaction item between the salary restriction order and monopoly and salary gap,the empirical results show that the incentive effect of salary gap on monopoly industries is weaker.The salary restriction order has less influence on the incentive effect of salary gap of monopoly enterprises,and the salary restriction order has no effect on the incentive effect of monopoly enterprises.Fifthly,by adding the comprehensive index of corporate governance into the regression analysis,we find that the coefficient of interaction between corporate governance andpay gap and pay limit order is significantly positive,which indicates that the higher the level of corporate governance,the more obvious the policy effect of pay limit order.