Research On The Tmt Heterogeneity And The R&D Investment Behavior

Innovation is the core driving force for economic growth and business development.If SMEs want to innovate and develop,they must play a key role in investment decision-making.However,it is risky to judge an enterprise's innovation strategy solely on the ability of the CEO.More specifically,the CEO needs the communication and cooperation of team members to improve the sustainable development and innovation ability of the enterprise.Therefore,as the most influential group in the enterprise,Top Management Team(TMT)has a crucial influence on the enterprise's R&D investment behavior.As an important theory to study TMT,Upper Echelon theory holds that demographic variables such as age,gender,professional background,education level and tenure can well reflect some TMT characteristics,and link the characteristics of managers' backgrounds with organizational output,providing the application conditions for the TMT development.The diversity of the characteristics of TMT members form the TMT heterogeneity,and the influence of this heterogeneity on the decision-making behavior of enterprises is often hidden,imperceptible and silent,which is not easy to attract people's attention and awareness.This is also the reason why researchers ignore the influence of TMT heterogeneity and find it difficult to judge the "positive" or "negative" effect.Finkelstein et al.(2009)pointed out that executive team members are often psychologically measured for risks and benefits due to their own traits,and influence the strategic development direction and organizational behavior of the company through certain hidden factors.Risk is a factor that must be considered when TMT members make R&D investment decisions.Risk preference is a key factor that influences their decisions.The different background characteristics of executive team members will give them different cognitive abilities and values,which in turn will lead to different organizational risk preferences.Then,does organizational risk appetite as a hidden factor affect the R&D investment behavior of the company? Can organizational risk preference play a mediating role between TMT heterogeneity and the R&D investment behavior? At the same time,considering the situational influence of executive compensation incentive,equity incentive and government subsidy incentive,does it significantly adjust the relationship between TMT heterogeneity,organizational risk preference and the R&D investment behavior? Further distinguishing between financing constraints,growth opportunities,and expectations gaps,is the mediating effect of organizational risk preference still significant? Is the moderating effect of executive compensation incentive,equity incentive and government subsidy incentive still significant? There is little literature on the in-depth study of these issues.Based on this,this paper focuses on the TMT heterogeneity and enterprises' R&D investment behavior,and using a combination of theoretical analysis and empirical testing,taking the annual report data of companies listed on GEM from 2009 to 2017 as the research sample,CSMAR database,WIND database and manual search annual report were used as data sources,introducing the mediating variable of organizational risk preference,and taking the incentive mechanism of enterprises as the moderating variable,the relationship between TMT heterogeneity and the R&D investment behavior is comprehensively expounded,the main research contents and conclusions are as follows:(1)Relaxing the hypothesis of TMT risk aversion,based on the utility analysis of individual risk preference and organizational risk preference,the paper has analyzed static and dynamic economics mechanism of TMT heterogeneity and the R&D investment behavior,has constructed the static and dynamic economic model,lay a solid economic foundation for the following theoretical hypothesis and empirical analysis.(2)Using the indicators such as age,gender,education level,professional background,and tenure as proxy variables of the TMT demographic characteristics,this paper analyzes the mediating effect of organizational risk preference on TMT heterogeneity and the R&D investment behavior.The results show that there is a partial mediating effect on organizational risk preference.That is to say,TMT heterogeneity will influence the R&D investment behavior through organizational risk preference to different degrees.And further distinguishes between growth opportunities,financing constraints,and expectation gaps,it is found that the mediating variable of organizational risk preference has stronger effect on the R&D investment behavior under low growth opportunity,low financing constraint and expectation gap.(3)Introducing incentive mechanism,from internal incentive mechanism and external incentive mechanism,namely,executive incentive(compensation incentive and equity incentive)and government subsidy incentive mechanism,this paper analyzes whether the relationship between TMT heterogeneity and R&D investment behavior will be affected by the adjustment of executive incentive and government subsidy incentive.Results found that the salary incentive,equity incentive and government subsidies incentive adjust the direct and indirect moderating relationship between TMT heterogeneity and R&D investment behavior,in addition,in the process of moderating relationship between the TMT heterogeneity and the R&D investment behavior,the compensation incentive and equity incentive have complementary effects,and the executive incentive and government subsidy incentive have interactive effects.Further,in order to verify the stability of the risk preference,on the basis of the regulating effect of test models available,to distinguish the expectation gap,growth opportunities and financing constraints,the results showed that low growth opportunities,financing constraints and expectation gap,salary incentive,equity incentive,and government subsidies incentive regulation effect of the organization risk preference as intermediary variable.(4)Weighing the gender,age,professional background,education level and tenure multi-dimensional variables of the TMT heterogeneity and the decision-making degree of the team members,using entropy weight method and cluster analysis method to consider the different weights of the heterogeneous characteristics and team members have a weight of decision-making influence.The results show that there are differences in the weights of the five dimensions of the TMT heterogeneity and the decision-making weights among TMT members in different years,it is necessary to put forward targeted policy Suggestions based on the internal and external environment of GEM companies,including the optimization measures of static and dynamic governance structure.The innovation of this paper lies in:(1)On the research angle,based on the theoretical analysis framework of Upper Echelon theory,the organization's risk preference and incentive mechanism are included in the same analysis framework,focusing on how the TMT heterogeneity is transmitted to the R&D investment behavior,along the path of the TMT heterogeneity — organizational risk preference — enterprise R&D investment behavior.From the perspective of internal and external incentive mechanisms,it distinguishes direct and indirect moderating mechanisms,identifies and explores the formation process of organizational risk preferences,and enriches the framework model between executive team heterogeneity and R&D investment behavior.(2)On the research methods,econometric methods such as nonlinear multiple panel threshold model,mediating effect model,regulating effect model and cluster analysis model are used to reveal the influence of TMT heterogeneity on enterprise R&D investment behavior.In the study of whether there is a threshold effect on the R&D investment behavior of enterprises in GEM,the subjective division of growth interval is avoided.The panel threshold model and Bootstrap self-sampling method are adopted to determine the threshold value according to the characteristics of the data,so as to accurately study the influence of "degree" on the R&D investment behavior of enterprises.Introducing mediating variable of organizational risk preference and moderating variable of incentive mechanism,using mediating effect model and moderating effect model to study its static and dynamic effect;In the process of exploring the optimization measures of the static and dynamic structure of TMT,entropy weight method and cluster analysis method are adopted to empirically analyze the weight of various heterogeneity characteristics and decision-making weight of TMT members in order to distinguish the influence of different weights.(3)On the research content,the research of TMT heterogeneity and the R&D investment behavior are reorganized and defined.Through literature review,previous studies mostly focus on the TMT heterogeneity directly impact on the organizational behavior,this paper with every dimension of TMT heterogeneity characteristics,namely,gender,age,professional background,education level and the tenure heterogeneity as the breakthrough point,in-depth exploration of its internal mechanism on enterprise R&D investment behavior,on the one hand,the use of management,psychology and economics multidisciplinary cross domain knowledge,to explore the mediation effect of organizational risk preference,in-depth analysis of TMT internal communication and collision decision-making process;On the other hand,in order to verify the stability of risk preference and enrich relevant studies on organizational risk preference,the moderating effect is analyzed from two dimensions of internal and external incentive mechanism,and the combination of economic analysis and management empirical analysis is adopted to verify the reliability of the results.