Research On The Relationship Between CEO Incentives, Corporate R&D Investment And Corporate Growth

In recent years,the growth model of enterprises depending on investment in traditional production factors has gradually decreased with continuous economic recession in the whole world.Therefore,China's enterprises are facing with challenges in their growth ability,which can only adopt the innovation and reformation to achieve sustainable development,enhancing the ability of independent innovation,profitability and anti-risk capacity inside-out,so as to obtain more development opportunities.As the most important human capital of an enterprise,chief executive officer(CEO)is the principal part of enterprise innovation,the collector of information,the maker of decision making in the modern corporate governance,who plays an important and even decisive role in the growth of enterprise innovation.For achieving the goals of enterprise development,the implementation of effective incentives for CEO can better give play to their potential in the human capital.Therefore,focusing on the theme of CEO incentive,this paper studies in depth the mechanism of CEO incentive that affects the technological innovation and growth of enterprises,so as to provide reference for promoting the innovation and development of enterprises in China while hoping to enrich the existing theories.First of all,the research ideas of this paper are as follows: two levels of variables are introduced in the design of independent variables,among which one is short-term salary incentive,medium and long-term equity incentive that represent explicit incentive,the other is CEO management autonomy(duality)that represents implicit incentive.Meanwhile,the intermediary variable is introduced to research and develop the investment intensity for further studying the transmission mechanism between CEO incentive and growth of enterprise.The regulatory variable is introduced to explore the level of education for studying whether the interaction between the level of education and CEO incentive enhances the R&D investment,so as to expand the research on the process of CEO incentive.After determining the research framework and ideas,this paper sorts out the relevant theoretical literature of CEO incentive,growth of enterprise,R&D investment and level of education.In the aspect of CEO incentive and growth of enterprise,the scholars at home and abroad have completed a lot of researches on the topics related with the executive incentive and enterprise performance,but the research target is mainly focused on the material incentive of senior management,and the research on CEO incentive and growth of enterprise is relatively not comprehensive.In the aspect of research on the intermediary effect,most of the existing researches focus on two aspects: management incentive and R&D investment,R&D investment and growth of enterprise,which take rarely R&D investment as the intermediary variable to study the transmission mechanism between CEO incentive and growth of enterprise.In the aspect of regulatory variable,a few scholars have introduced the level of education into CEO incentive and R&D investment as the regulatory variable,and most of them take the education level of CEO and other personal characteristics as independent variables to study the effect on the enterprise performance.Based on incentive theory,theory of technological innovation,human capital and other theories,this paper puts forward 9 hypotheses,taking the effect of CEO incentive——R&D investment——growth of enterprise as the overall theoretical framework.Then,taking the high and new tech enterprises carried out the IPO in Shanghai and Shenzhen as the research target,this paper has selected 125 high and new tech enterprises and collected their sample data from 2014 to 2017,which carried out the descriptive analysis,correlation analysis,multiple linear regression by Excel,Eviews,SPSS and other empirical software.Finally,the following results were concluded:(1)CEO salary incentive has a positive impact on the growth of enterprises;(2)the incentive that CEO held shares has a positive impact on the growth of enterprises;(3)CEO autonomy(duality)has a positive impact on the growth of enterprises;(4)CEO salary incentive has a positive impact on the R&D investment of enterprises;(5)the incentive that CEO held shares has a positive impact on the R&D investment of enterprises;(6)CEO autonomy(duality)has a positive impact on R&D investment of enterprises;(7)R&D investment has a positive impact on the growth of enterprises;(8)R&D investment plays an intermediary role between CEO incentive and growth of enterprise;(9)the educational level of CEO has a positive regulatory role between CEO incentive and R&D investment.In addition,the research conclusion of this paper demonstrates that the scale of enterprises is also a variable that observably affects the R&D investment and growth of enterprises,and the debt to asset ratio is a variable that has the significant negative impact for them.The theoretical contributions of this research are as follows:(1)It explicated the effect of different incentive measures on the growth of enterprise and expanded the incentive theories by verifying the positive effects of CEO explicit incentive,implicit incentive for the growth of enterprise.(2)It explicated the effect of R&D investment on the influential mechanism of growth of enterprise and "black box" of the influential effect,and enriched the application of theory of technological innovation by exploring in-depth the intermediary role of R&D investment for CEO incentive and growth of enterprise.(3)It verified the positive regulatory role of education level on the CEO incentive and R&D investment of enterprise,and excavated education level as the research of regulatory variable,and expanded the application of human capital.The suggestions for management practice in this paper are as follows: in the contemporary background of continuous economic recession in the whole world,it is necessary to further stimulate the innovation and creativity of enterprises and promote economic resurgence under the condition of decelerated growth of the investment of traditional production factors.Therefore,in the aspect of designing the incentive mechanism,the investment philosophy shall transform the HR cost into human capital.In the aspect of the relationship between shareholders and CEO,the idea shall transform the competing idea into the concept of win-win cooperation in-depth.In the aspect of promoting the sustainable development of enterprises,the development model shall transform speculation for profit into independent innovation.The specific measures are as follows:(1)The selection of qualification should further combine with the assessment optimization by optimizing the orientation.(2)The short-term incentive should further combine with long-term incentive by sharing benefits.(3)The material incentive should further combine with full authorization by improving mechanism.(4)For comprehensively supporting sustainable development of enterprises,the enterprise investment should further combine with governmental guidance by political support.Finally,this paper has certain research limitations and needs to be improved in the future research due to the limited factors such as the shorter survival period of high and new tech enterprises as the research target in this paper,the limited information disclosure of listed companies,the relevant measurement indicators to be studied and so on.