The Relationship Among Tmt Heterogeneity,R&D Investment And Firm Value In Listed Companies Of Declining Performance

Due to the abnormal fluctuation and the weak recovery in the world’s economy,the Chinese firms in transition are facing a more sophisticated environment and experiencing severer challenges.The firms which are able to seize the opportunities may have a chance in rapid growth,whereas those struggles to adapt to the environment will soon be eliminated.In order to survive and develop,the firms have realized the importance of technology innovation,whilst eager to enhance the core competence and the ability to adapt to the environment by investing research and development(R&D).Being a key component in firms strategy affecting the future development of firms,R&D whose strategic decision making and implementation is strongly related with the Top Management Team(TMT).The board of directors in the firms with declining performance intends to regroup the TMT to change the current strategies,so as to adapt to the environment and improve the operating condition.There are several noteworthy issues among the firms with declining performance,such as how the heterogeneity within a regrouped TMT can affect the strategic decision making and implementation in R&D,whilst improve its business practice in the main industry and prevent further decline in performance,as well as whether investing the R&D will effectively achieve better firm values etc.Based on the Upper Echelons Theory,the Innovation Theory,the Information Decision Theory,and The Corporate Value Theory,we have chosen 208 firms with declining performance between years 2012 and 2014 as the study subjects.Certain research models have been built to investigate the relationships of recessive heterogeneity(career,tenure,and educational background),R&D investment,and firm values.Consider that environmental dynamics has certain impact on the TMT regrouping and strategy implementation,we have taken the environmental dynamics as a moderator variable during the two processes.The TMT heterogeneity and firm values are selected as the research topic.We aim to reveal the fact that how the TMT heterogeneity can directly affect firm value or indirectly affect it by investing R&D,so as to provide practical solutions to improve firm values,which is of great importance.In this thesis,we mainly treated the implicit heterogeneity,which is more related to the TMT(tenure?),as the independent variable among the firm subjects with declining performance.IBM SPSS Statistics V21.0 software is introduced to examine the validity of the hypothesis,showing the heterogeneities in tenure,career,and educational background have positive impacts on R&D investment,whilst R&D investment has a positive impact on firm values.Meanwhile,these three elements also have positive impacts on firm values.Environmental dynamics effectively adjust the relationship between the TMT educational heterogeneity and R&D investment(being the strategic decision making).