Research Of The Moderating Effect Of Corporate Governance On Relationship Between Equipment Manufacturing Industry’s R&D And Firm Performance

Equipment manufacturing industry has become the engine power in oureconomic development. However, it has a long distance between the world-classadvanced level. To acquire the core technology, upgrade the industrial-structure andtransform successfully, it relies on advanced technology. Furthermore, the advancedtechnology depends on gradually perfecting research and development structure andcorrect direction. However, existing the agency-conflict in corporate enterprises, therelationship between R&D investment and firm performance is not exactly positivelycorrelation. The characteristic of R&D, which is high-risk, asymmetric informationand lagged revenue, causes the agency problem more serious. Reasonable corporategovernance structure can relieve it and reduce agency cost. It also encourages themanagers to invest the R&D project actively and supervise the processeffectively.Therefore, on the view of corporate governance, exploring the relationshipbetween equipment manufacturing industry’s R&D and firm performance has afar-researching theoretical and practical meaning.Fully referring innovation theory and agency theory, we mainly explore themoderating effect of corporate governance on R&D investment and firm performance.Firstly, basing on the latest research of corporate, R&D and firm performance, raisethe key point. Then, separate the corporate governance into internal one and externalone. This article puts forward theory hypothesis basing and moderating modelaccording to the characteristic about the governance and R&D investment and themoderating effect to R&D and firm performance. Finally, we examine the hypothesiswith the sample of listed on Shenzhen and Shanghai Stock market and proposesuggestions on different views of corporate governance. At the same time, point outthe shortcoming of this study and future direction. According to the results, give somesuggestions on stock right structure, incentive mechanism and lower the degree ofindustry concentration.The empirical results can encourage the equipment manufacturing enterprises toimprove their corporate governance and the relevant departments to promote a goodexternal environment. This study provides theoretical directions and practical adviceson how to optimize governance structure, to have a light on R&D investment andimprove enterprise performance.