Managerial Power,equity Incentive And Enterprise R&D Investment Intensity

With the increasingly fierce market competition,innovation has become the source for enterprises to continuously boost their competitiveness,and R&D activities play an important part in enhancing the scientific and technological innovation capacity of enterprises.In recent years,the proportion of enterprises' R&D cost has been increasing,but the level of R&D investment among different enterprises is quite different.There is a close relation between the investment decision and the management of enterprises.The typical characteristic of “the separation of ownership and control” of modern enterprises gives rise to the first agency problem.In order to alleviate the agency conflicts,equity incentive has become a new trend.However,few scholars pay attention to the self-serving opportunism behavior of business executives in the design of equity incentive plans.Executives can use their power to set their own remuneration.Is it self-interest or a win-win situation? Traditional agency theory believes that executives can use their power to set their own salary,which is a kind of self-interested behavior.The main reason is that existing research only talks about the relationship between executive use and compensation,while neglecting the investment behavior of executives after getting paid.This paper incorporates managerial power,equity incentive and R&D investment intensity into a uniform analysis framework,and from the recessive factor of management motivation it deeply explores the relationship among them,studies the impact of equity incentive on R&D behavior in corporate governance,and enriches the existing research on innovative investment.In order to test the relationship among managerial power,equity incentive and R&D investment intensity,the author conducts an empirical research with the method of multiple regression analysis and on the basis of research samples of Shanghai and Shenzhen A-share listed companies from the year 2009 to 2016.The research shows that managerial power is positively correlated with the level of equity incentive—the greater the management power,the higher level of equity incentive;Equity incentive conducted by managers can eventually stimulate enterprises' enthusiasm on R&D investment,so as to enhance the intensity of R&D investment.For the influence of managerial power to the R&D investment intensity,equity incentive plays an intermediary role in the influence of managerial power on R&D investment intensity,which results partly from equity incentive implementation.In state-owned holding enterprises,the intermediary effect of equity incentive is not remarkable,and the result of equity incentive is not effective.However,in non-state holding enterprises,managerial power can promote the equity incentive level,and then increase the R&D investment intensity of enterprises.This paper not only enriches the research content of related fields and expands the research scope,but also explores the factors influencing enterprises' R&D investment from a new perspective,which has a certain reference significance for improving agency relation,perfecting corporate governance and enhancing competitiveness of enterprises.In view of the above research conclusions,the paper puts forward the countermeasures from the internal governance mechanism and external governance mechanism,including the rational optimization of managerial power,the design of scientific and effective compensation contracts,and the perfection of internal and external supervision mechanisms.