Research On Effects Of R&D Investment On Company Performance

In this era of rapid economic development and fierce competition,innovation ability as a core competitiveness of the corporate,can provide a driving force for the steady stream of the company and ensure company's victory in competition.GEM enterprises has the characteristics of fast growth,strong innovation and so on,its market competitiveness mainly from the formation of independent innovation model and innovation ability.The majority of the companies in this sector are hi-tech enterprises and their investment in research and development level can represent China's high-tech development in some degree.However,the major decision,like R&D investment,usually is mastered in the hand of the executive officer.Therefore,research the effects of executive incentive on the relationship between R&D investment and corporate performance,and hence perfect the design of executive incentive mechanism,appears to be particularly important.Executive incentive is divided into explicit incentives and implicit incentives,the former includes wages,bonuses,allowances and other equity incentives;and the latter includes job promotion,reputation and personal accomplishment.But most of the existing scholars focus on the impact of explicit incentives on R&D investment and on the company performance;and few scholars study the effects of implicit incentives.This paper put executive incentive,R&D investment and company performance into one framework,divide the executive incentive into explicit incentives and implicit incentives,study the executive incentive whether have the moderating effects on R&D investment and corporate performance respectively.Based on the results of previous studies,this paper,firstly,according to the analysis of principal-agent theory,core competence theory and incentive theory,through introducing the contextual factors of executive incentive,construct a model about the relationship among the three,and provides the theoretical basis for the empirical research.Secondly,based on the data of GEM companies listed in the period from 2012 to 2015,this paper uses the method of multiple regression analysis to analyze the data of the sample companies,summarize the listed companies of China's listed companies,and then analyzes the company's performance level and executive incentives,laying the foundation for empirical analysis.Finally,this paper examines the relationship between R&D investment and corporate performance by using executive incentive as a regulatory variable.The research proves that there is a positive correlation between R&D investment and corporate performance and that R&D investment has lagging effect;Executive incentive can play a positive role in the relationship between R&D investment and corporate performance,while executive promotion incentive Then play a negative regulatory role.At the end of this paper,according to the relevant empirical conclusions,this paper put forward some proposals on increasing R&D investment and designing mechanism of the company's executive incentive.