Board Capital And R&D Investment

With the market competition becoming more and more fierce, nowadays enterprises pay more and more attention on the cultivation and promotion of the innovation ability. As an important investment decision, R&D investment is the source of enterprise’s innovation ability, the breakthrough of enterprise’s competitive ability and the foundation of enterprise’s survival and development. The board of directors is the highest decision-making body in the enterprise, based on the resource dependence theory, the board capital have resources that affect the enterprise’s strategic decision, and the board capital is the precondition of the board of directors to provide these resources. So, Board capital influences the enterprise’s strategic decision, including R&D investment decisions. As a result, the research of the relationship between board capital and R&D investment has significant meaning.Based on reviewing the study about board capital and investment behavior, firstly this paper defines the concept and composition of board capital, expounds theory of the board capital affect the investment behavior. Secondly, based on the perspective of corporate governance and resource dependence theory, from every feature dimension of board human capital and board social capital and the interaction of board human capital and board social capital the three big aspects, analyze the effect mechanism of board capital and R&D investment. Thirdly, put forward the research hypothesis, define variables and build the model. Finally, select the information technology industry listed companies in China cover 177 listed companies as research samples, and carry out empirical analysis of the impact of board capital on R&D investment, finally get following conclusions:(1)Board human capital has a significant positive impact on the enterprise R&D investment. In the five measures of board human capital, both the directors’ average age and the directors’ age heterogeneity have a negative influence on R&D investment, but not significant. The directors’ education background heterogeneity has a positive impact on R&D investment, but not significant. Both the directors’ average education level and the directors’ background heterogeneity has a significant positive influence on R&D investment.(2)Board social capital has a significant positive impact on the enterprise R&D investment. The two measures of board social that the link between the board of directors and the board of directors’ political resources has a significant positive influence on R&D investment.(3)The interaction of board human capital and board social capital have a positive impact on the enterprise R&D investment.Based on these findings, in order to improve R&D investment and enhance innovation ability and competitive ability of the listed companies, this paper put forward the following recommendations on the board capital:(1)The listed companies should examine its human capital and social capital in the selection of directors of, in order to optimize the distribution of the members of the board of directors.(2)The listed company should gradually establish a perfect board capital management system and improve the board capital levels.In this paper, the innovation points are:(1)The innovation of research perspectives of the investment decision-making. Previous literature from the perspective of the overall corporate governance to study the impact on the investment decision, there are few literature separately from the board capital point of view to study the effects on investment decisions.(2)The innovation of board capital measurement system. This paper adopt the entropy value method fitting out of board human capital comprehensive index and board social capital comprehensive index, and consider the interaction of board human capital and board social capital, which is different from other scholars take separate indicators to measure the board capital.