On The Executive Incentives,Innovation Input And High-Quality Development Of State-Owned Enterprises

At present,the high-quality development of state-owned enterprises(SHQDe)is considered inevitable,necessary and urgent,and it is of great significance to study how to achieve SHQDe.In view of the institutional backgrounds of the profound changes in the executive incentives system and new historical heights of innovation in the new era,this paper focuses on the two key influencing factors of executive incentives and innovation input.Guided by Xi Jinping’s views of high-quality development(HQD)in the new era and other related theories,following the principles of classification,starting from the connotations and measurements of SHQDe,integrating the methods of normative research and empirical research,theoretical analysis and empirical testing,selecting commercial first-class stateowned listed companies(Shanghai and Shenzhen A shares)from 2010 to 2020 as research samples,it deeply studies the relationships and internal mechanisms of executive incentives,innovation input and SHQDe,in order to provide empirical evidence and policy recommendations for how to achieve SHQDe.The main research contents and conclusions are as follows:First,executive compensation incentives,executive equity incentives and executive political incentives can significantly promote SHQDe.Specifically,executive compensation incentives as the main way of executive incentives at present have a “rigid” effect on supervising,motivating and constraining executives,strengthening the mitigation of the multiple principal-agent contradictions of state-owned enterprises(SOEs)with the gradual establishment of the “classification + differentiation” assessment models in which executive compensation and operating performance are closely linked.Executive equity incentives strengthen the satisfaction of executives’ self-worth,and to a certain extent tie the interests and goals of executives to government regulatory goals,contributing to the same fate and long-term development of executives and SOEs.Executive political incentives can enable executives with the status of “quasi-political” to obtain more important benefits such as social status,sense of achievement,and power in addition to material incentives.And with the increasingly obvious trends of two-way cross-employment between executives and government officials,strengthening the political promotion expectations of executives,it has an irreplaceable positive incentive effect on SHQDe.Second,executive compensation incentives,executive equity incentives and executive political incentives have synergistic effects in promoting SHQDe.(1)With the government’s strong regulation on executive compensation,weakening the effectiveness of executive compensation incentives and making executive equity incentives more prominent,there is no essential difference between the material benefits brought by executive compensation incentives and executive equity incentives for executives at the top of the corporate pyramid,and the two have substitution effects on promoting SHQDe.(2)Although executive political incentives are indispensable to executives,due to my country’s special institutional attributes and official management system,it is impossible to “be an official” and want to make a fortune.Therefore,it is difficult for executive compensation incentives and executive political incentives to form a synergistic effect on promoting SHQDe.(3)Since the current average level of the overall shareholding ratio of executives is relatively low,the unique advantages of executive political incentives help to form an effective supplement to the lower level of executive equity incentives to achieve the effect of “1+1>2”,the two have a synergistic effect on promoting SHQDe.Third,internal control plays an intermediary role in executive compensation incentives,executive equity incentives and executive political incentives to promote SHQDe.On the one hand,the higher the quality of internal control,the greater the promotion of SHQDe.On the other hand,executive compensation incentives,executive equity incentives and executive political incentives can all promote SHQDe by building a good internal governance mechanism,and contributing to the achievement of internal control reporting objectives,asset objectives,business objectives,compliance objectives and strategic objectives.Fourth,innovation input can promote SHQDe.On the one hand,innovation input provides key support for SOEs to transform from the old kinetic energy that relied on extensive factor and scale input to the new kinetic energy that relies on innovation,and can form a strong driving force for SHQDe through new knowledge,new technologies,new models,new services,new products,new resources,and intermediate outputs including the accumulation of innovative talents brought by innovation activities helping to shape and strengthen core competitive advantages.On the other hand,the innovation of SOEs is urgent,mission-oriented,and facing the situation of “chasing,following,surpassing” at present,the scale advantage of innovation input is still very important.Only when the intensity of innovation input is high can it win the relative innovation advantages over competitors and obtain the value-added benefits brought by innovation.At this time,innovation input has a more obvious role in promoting SHQDe.Fifth,under higher financing constraints,financing constraints have a significant positive regulatory effect on innovation input in promoting SHQDe.Specifically,given the new historical heights of innovation and the government’s rigid regulatory requirements for innovation,the inhibitory effect of financing constraints on SOEs’ “whether or not”innovation has been weakened.Compared with lower financing constraints,higher financing constraints will stimulate SOEs to cherish limited innovation resources more,enhance the awareness of innovation input and output,treat innovation decisions with caution,strengthen process control of innovation activities,and strengthen the positive attitude of innovation input,making innovation input more efficient and performant.At this time,financing constraints can help strengthen the role of innovation input in promoting SHQDe.Sixth,the state-owned shareholding ratio,equity concentration and equity balance have different regulating effects on innovation input to promote SHQDe.(1)Under the influences of the strong driving force of innovation on development and the government’s strong supervision on innovation,the importance of SOEs’ innovation input and the resulting consciousness of innovation input have basically reached a consensus,and thus the adjustment and changes of the state-owned shareholding ratios will not have a significant effect on innovation input in promoting SHQDe.(2)The moderate concentration of equity strengthens the synergy of interests and governance capabilities of major shareholders.Major shareholders will pay more attention to sustainable development and the shaping of long-term competitive advantages,and then attach importance to innovation input and provide stronger support for innovation activities.At this time,equity concentration will help strengthen the role of innovation input in promoting SHQDe.(3)When the degree of equity balances is low,the small and medium shareholders have serious “free rider” and “inaction”behaviors due to the high supervision cost,and it is difficult to suppress the innovative selfinterest behavior of executives caused by the agency problem.And major shareholders are also prone to excessive,inefficient and low-efficiency innovative input behaviors due to the lack of effective checks and balances and supervision by other governance entities.At this time,equity balances have a significant negative regulatory effect on innovation input to promote SHQDe.Seventh,innovation input plays an intermediary role in executive compensation incentives,executive equity incentives and executive political incentives to promote SHQDe.(1)Both executive compensation incentives and executive political incentives can effectively alleviate the agency problem of executives in innovation decision-making and behavior,strengthen executives’ innovation risk-taking abilities,and help make highinnovation input decisions,increase the intensity of innovation input,and then promote SHQDe.(2)Under the current low shareholding ratio of executives,executive equity incentives are difficult to strengthen the synergistic effect of executives on innovation input.On the contrary,it may increase agency costs,affect the decision to make low innovation input,and inhibit input.And it will indirectly inhibit SHQDe by influencing the decision to make low innovation input and inhibiting innovation input,but still plays a significant role in promoting SHQDe in the end.Based on theoretical research and empirical analysis,around how to achieve SHQDe,policy recommendations are put forward from four aspects: strengthening high-quality balanced development,deepening the reform of the executive incentive system,improving the assessment mechanism of innovation input,and strengthening the governance effect of innovation incentives.The main innovations and contributions of this article lie in:First,this paper creates a complete chain of empirical analysis of executive incentives,innovation input and SHQDe,enriching the micro-theories of high-quality development.Establishing a measurement system for SHQDe from four aspects: development mission,financial performance,development capability and development sustainability,and using the measurement results to measure the explained variables,it not only empirically analyzes the relationship between executive incentives,innovation input and SHQDe,but also introduces mechanism variables such as internal control,financing constraints,and ownership structure to conduct in-depth research on its internal mechanism,which provides empirical evidence for a deep understanding of the relationship between the three and policy recommendations.Second,the established measurement system for SHQDe is highly targeted and practical.In addition to traditional indicators,the indicator “state-owned capital multiplier”is also created to quantify “enlargement of state-owned capita”,highlighting the development mission of SOEs.And the indicator “social value contribution ratio” is created to quantify the “social value contribution level”,emphasizing the importance of SOEs in social value creation.In addition,it can quantify statistics,monitor,analyze,measure,judge and assess the current states of SHQDe,which is convenient for vertical and horizontal comparisons,timely detection of existing problems,and further exploration of ways to improve.Third,this paper makes a breakthrough in empirical research design,enriching research results on executive incentives,innovation input and SHQDe.The details are as follows:(1)In addition to executive compensation incentives and executive equity incentives,it also constructs executive political incentive indicators to measure executive incentives,and examines the synergistic effect of executive incentives in promoting SHQDe.The research conclusions obtained have certain reference value.(2)When examining innovation input and SHQDe,it is found that under higher financing constraints,financing constraints have a significant positive moderating effect on innovation input in promoting SHQDe.This conclusion has great practical significance.(3)When examining executive incentives,innovation input and SHQDe,it is found that under a lower executive shareholding ratio,executive equity incentives will affect the decision to make low innovation input and inhibit innovation input,and indirectly inhibit SHQDe by influencing the decision to make low innovation input and inhibiting innovation input,which has great policy implications for the current reform of the executive equity incentive system of SOEs,and should attract attention.