A Study On The Relationship Between Equity Incentive And Innovation Investment Of Listed Companies In China

On the background of knowledge economy and the process of regional integration,companies should use innovation as a starting point to get the core competitiveness.China's overall R & D expenditure was large,but the average level of R& D intensity was much lower than the international level.Many companies were facing the problem of lacking innovation.In the process of Chinese supply side reform,the government made it clear that enterprises should use a reasonable incentive system to rise its innovation input,so as to improve the ability to innovate.Equity incentive system was widely used in enterprises which was of great significance to the innovation.However,the current equity incentive system was not perfect,most of the research on the relationship between equity incentive and innovation input was concentrated in a single plate,and it did not take the actual situation of the different stages of life cycle for the enterprise into consideration.Therefore,it was very difficult for enterprises to get reference comments in different stages of development.So this article explored the following questions: What was the correlation between innovation input and equity incentive? Whether the relevance of the two would change in different life cycle and whether the relevance of the two would be different for enterprises with different property rights?Based on the theory of life cycle,this paper reviewed the innovation input and equity incentive theory and their development in china,then analyzed the relationship between them.Selected the enterprises in Shanghai and Shenzhen A shares,the GEM and the SME as the study objects and used comprehensive scoring method,this paper divided the whole sample into three parts: growth,maturity and recession,respectively.Based on the sample data and under the consideration of other control variables and dummy variables,this paper established the panel data model to carry out empirical analysis.The paper concluded that:(1)There was a positive U-shaped curve between equityincentive and innovation input.(2)The relevance between equity incentive and innovation input would have different performance under different stages of life cycle.For the enterprises in the A-share sector,there was positive U-shaped relationships in the growth period,a negative correlation in the mature period and a positive correlation in the recession period.And performance of correlation was slightly different in the GEM and the SME.(3)In the non-state-owned enterprises,the equity incentive and innovation input had a U-shaped relationship but in the state-owned enterprises it only performed positively related.Finally,this paper given the recommendations:under the environment of the supply side reform and mixed ownership reform,there was an important role for using equity incentive to promote enterprise innovation.We should be noted that when we used equity incentive to improve the enterprises' innovation level,we had to fully consider the stages of life cycle the enterprise in and property of it to maximize the promote effect of innovation for enterprises' long-term development.