Executive Incentive,Internal Control And Technological Innovation Investment

Since the implementation of "13th Five-Year Plan",the core position of innovation in the overall national development has been clearly defined.As an important carrier for implementing national innovation activities,enterprises have become the main driving force for national innovation and development.Technological innovation investment is the source of enterprises' implementation of innovation strategies,and the key driving force for enterprises to survive and develop and gain market competitive advantage.Therefore,how to effectively improve the technological innovation investment level of enterprises,solve the problem of insufficient independent innovation capability of Chinese enterprises,and realize the transition from "element-driven" to "innovation-driven" are hot topics of common interest in the current theoretical and practical circles.In enterprises,executives directly participate in the daily operation and management.They are the backbone of decision-making and implementation on technological innovation strategies.The level of technological innovation investment depends largely on the importance that executives attach to R&D.However,the principal-agent theory points out that,as a rational economic person,executive have insufficient motivation to actively invest in technological innovation,and executive incentives have emerged in the situation of separation of ownership and management rights.Executive incentives can effectively promote the convergence of the interests of executives and shareholders,compensate for risk loss of innovation investment of corporate executives,reduce agency conflicts,and increase the willingness of executives to take the initiative to innovate.However,due to improper incentives of senior executives,phenomena such as "high price compensation","financial fraud",and "executive corruption" have emerged endlessly in recent years,which have caused irreversible adverse effects on the innovation and development of enterprises.As an effective governance mechanism to ensure the efficientoperation of an enterprise,internal control can not only effectively monitor self-interest behaviors of executives,but also alleviate the degree of information asymmetry between executives and shareholders.Based on this,it is necessary to explore the relationship between executive incentives,internal control and technology innovation investment.Based on the analysis of previous research results,this paper combines the innovation theory,principal-agent theory,information asymmetry theory and incentive theory,puts forward the research hypothesis and builds a regression model.Then,This article selects A-share listed companies from 2013 to 2018 as the research object,using Excel and Stata statistical analysis software to analyze the data,and the relationship between the three variables was verified by multiple regression.From the joint perspective of executive incentives and constraints,based on the analysis of the effects of single currency compensation incentives,equity incentives,and on-the-job consumption on technological innovation investment,this paper focus on the synergistic effects of the combination of executive incentive on technological innovation investment and the moderating effect of internal control on the relationship between executive incentives and technological innovation investment.The results show that :(1)Currency compensation incentive,equity incentive and on-the-job consumption all have positive effects on technological innovation investment;(2)Based on the analysis of executive incentive portfolio,it is concluded that currency compensation incentive,equity incentive and on-the-job consumption are not completely independent.There is a complementary relationship between executive currency compensation and equity incentive;there is a complementary relationship between executive currency compensation incentive and on-the-job consumption;and there is an alternative relationship between equity incentive and on-the-job consumption.(3)When examining the regulatory effect of internal control between executive incentive and technological innovation investment,it was found that the internal control impact on the relationship between the two is different,the internal control promotes the positive relationship between executives equity incentive and technical innovation investment,also promotes the positive relationship between on-the-job consumption and technical innovation investment,but inhibits the positive relationship between executive currency compensation incentive and technical innovationinvestment.According to the research conclusion of this paper,it is suggested that the listed enterprises in China need to :(1)to develop an innovation-oriented executive compensation system,and add technical innovation input index into executive performance appraisal;(2)to optimize the design of incentive contracts for executives,and pay attention to the synergistic incentive effect of incentive combination of executives;(3)to improve the internal control system of enterprises,strengthen the positive role of internal control supervision and constraints,and increase the tolerance of innovation failure of executives;(4)Attach importance to the joint governance mechanism of incentives and constraints to enhance the driving force of independent innovation of enterprise executives.The research in this paper will provide evidence for listed enterprises to solve the lack of motivation for senior executives' initiative innovation under the new situation in China,and establish a more reasonable incentive and restraint mechanism for executives,so as to effectively improve the level of investment in technological innovation.