Research On The Effect Of Goertek’s Stock Option Incentive On R&D Innovation

In the era of rapid development of knowledge economy,the role of science and technology for economic growth is more important,innovation capacity as an important factor affecting competitiveness,many countries regard it as a key development goals.China published the "National Medium and Long-term Science and Technology Development Plan(2006-2020)" that also pointed out that China’s independent innovation capability is weak,it has the phenomenon that core competitiveness is not strong.In September 2006,the G20 summit also regard "scientific and technological innovation" as an important topic of the meetings,scientific and technological innovation has become an important means to enhance the competitiveness of the country,The R & D investment is the source to scientific and technological innovation,and only put enough R & D resources,it is possible to obtain new products,enhancing the ability of independent innovation,making the companies survive in the product market which competition fiercely.Because of the prevailing agency problems,managers are reluctant to invest in R & D activities that are characterized by high risk and high investment.The equity incentive has been used by more and more companies because of the characteristics of relieving agency conflicts,mobilizing employees’ enthusiasm,and retaining talents.The research shows that different incentive objects have different support for R & D expenditure.The empirical analysis shows that the strongest incentive for R & D activities is not the main way that many enterprise chooses.Therefore,the paper analyzes the Goertek ’s stock in the manufacturing industry and the R & D innovation,the patent output and the revenue-generating results of the Goertek ’s stock before and after the equity incentive.At the same time select the peer companies to compare.To analyze the effect of stock option incentive and restrictive stock incentive on enterprise R & D innovation activities.Then,combining the principal-agent theory,prospect theory,human capital theory and content incentive theory,constructing the analysis model of the action mechanism,and analyzes the mechanism of the stock incentive action on the enterprise R & D innovation activities.Finally,according to the result of the analysis,the paper puts some suggestions for improving the equity incentive plan.The results of data analysis show that,after the implementation of equity incentive,the enterprise’s R & D innovation index has a significant increase compared with the previous empirical study.but the growth of Goertek ’s growth rate of the R & D input and patent output is obviously higher than the other companies who used the restrictive stock.The reason why is that is the difference of the endogenetic.Difference endogenetic of stock option incentive makes the stock option has more stronger incentive than that of the restricted stock,and the risk aversion of the stock option is more weaker than that of the restrictive stock.With the low risk aversion and the high incentive,the managers in the stock option will have more willness to strength the investment on R & D.Due to the equity incentive for employees with incentives,can mobilize the subjective initiative of human resources,and thus contribute to the development of enterprise R & D results as well as R & D income increase.