Research On The Relationship Between Executive External Compensation Gap,Risk Preference And Firm R&D Expenditure

Innovation is the first productive force of enterprise development,and the success of innovation activities fundamentally depends on the support of enterprise R&D funds.As the decision-maker of enterprise development strategy,senior executives are the key figures in enterprise innovation activities,and their decision on innovation strategy is directly related to enterprise development direction.Compensation as an important means of motivating talents,how to maximize the incentive effect of compensation to promote enterprise innovation,is a major problem facing modern enterprises.Therefore,In today’s society where executive compensation varies greatly,the impact of executive external compensation gap on their decision-making attitude and behavior is worth further discussion.This paper mainly examines the relationship between executive external compensation gap,executive risk preference and R&D expenditure.Based on principal-agent theory,contract reference point theory,incentive theory and risk preference theory,the theoretical analysis framework of executive external compensation gap,executive risk preference and R&D expenditure is constructed.On this basis,we empirically examine the relationship between the external executive compensation gap and R&D investment,between the external executive compensation gap and executive risk preference,and the role of executive risk preference between the external executive compensation gap and corporate R&D investment.The executive external pay gap is further divided into positive external pay gap and negative external pay gap,and it is further studied.Taking China’s Shanghai and Shenzhen Ashare listed companies from 2011 to 2020 as research samples,multiple regression analysis is used to test and analyze,and its robustness is tested.The result shows that there is a positive correlation between external compensation gap and R&D investment.The positive external compensation gap promotes R&D investment,while the negative external compensation gap inhibits R&D investment.There is a positive correlation between executive external pay gap and executive risk preference.The positive external pay gap promotes executive risk preference,while the negative external pay gap inhibits executive risk preference.Executive risk preference plays a mediating role between executive external pay gap and firm R&D investment,positive external pay gap promotes firm R&D investment by enhancing executive risk preference,and negative external pay gap inhibits firm R&D investment by weakening executive risk preference.This paper enriches the influence of executive external compensation gap on enterprise decision-making behavior.At the same time,the variable of executive risk preference is introduced to explore the role of executive risk preference in the impact of external executive compensation gap on R&D investment.It enriches the research field of executive external compensation gap,and broadens the research perspective of enterprise innovation,and provides useful reference for executive compensation incentive mechanism.