Pay Gap,Market Competition And Enterprise Innovation

With the acceleration of the global integration process,innovation is an important support for enhancing international competitiveness and realizing long-term development of enterprises.Therefore,how to promote enterprise innovation has become a topic of increasing public concern.As the main body of innovation,if companies want to occupy a favorable position,they must enhance their ability to innovate.However,due to the high risk of the company’s innovation activities,the return on income is difficult to predict,and the executives will pay more attention to short-term interests,thus affecting enterprise innovation.How to design an effective mechanism to encourage executives and employees to invest more in corporate innovation activities is particularly important.In the incentive mechanism,the impact of salary incentives is very significant,and a reasonable range of pay gaps is an important part of whether incentives are effective.With the increase in executive compensation,the pay gap with ordinary employees is also increasing,and the average salary level of industry executives is also changing.The incentive effect of internal pay gap and external pay gap has not yet reached an agreement.Then,at this stage,what is the impact of China’s implementation of the salary-restriction policy on R&D innovation?How to build an effective compensation gap incentive system to promote enterprise innovation?What role does the external environment such as market competition play in it?This is still a question worthy of further discussion.From the perspective of agency theory,tournament and behavior theory,and competition theory,this paper uses a combination of normative and empirical research methods to examine the impact of executive-employee internal pay gaps and executive-sector external pay gaps on corporate innovation,and tests the regulatory role of market competition.The research generally includes the following six chapters:The first chapter is the introduction.This chapter first expounds the research background and significance,explains the research content and methods,and summarizes the research framework,and finally draws the innovation of this paper.The second chapter is the literature review.Incorporate the research results of predecessors and comment on them,so as to inspire this article to make a more in-depth discussion based on existing research.The third chapter first defines the core concept of the salary gap,market competition and enterprise innovation,explain the theoretical basis and analyze it accordingly,so as to put forward five research hypotheses;the fourth chapter,expounds the basis and data source of sample selection,and sets the research variables and measurement models;Chapter five,empirical analysis of sample data and conducts robustness test;The sixth chapter,summarize the research results and put forward policy recommendations,and finally expound the limitations of research and the future exploration direction.This paper selects the 2011-2016 China A-share listed company as the research sample,summarizes the theoretical knowledge and puts forward the research hypothesis,and uses the negative binomial regression method to empirically test the relationship between pay gap,market competition and enterprise innovation.The results show that:(1)The internal and external pay gaps and the enterprise innovation have an inverted U-shaped relationship,that is,the internal and external pay gaps have a range effect on the promotion of enterprise innovation,and there is an optimal pay gap.(2)Intense market competition can promote enterprise innovation.(3)Market competition has a regulating effect on the relationship between pay gap and enterprise innovation,that is,fierce market competition promotes the positive impact of internal and external pay gaps on enterprise innovation.The innovation of this paper is mainly as follows:In the research content,this paper introduces the internal pay gap between executives and employees and the external compensation gap between executives and industry executives into the framework of enterprise innovation influence factors,enriching the research on influence factor of enterprise innovation.In addition,this paper analyzes the adjustment effect of market competition while examining the incentive effect of pay gap.However,the existing research rarely incorporates market competition,which makes the paper broaden the research horizon.In the research method,the existing literature mostly chooses research and development.As a proxy variable for enterprise innovation,this paper selects the number of patents to measure enterprise innovation,and adopts a negative binomial regression model for the distribution characteristics of patent quantity data.The research method is reasonable and novel.The conclusions of this paper have clear policy implications,not only provide empirical support for the "limit pay order" policy,but also provide some reference for China’s pay control policy,and conform to the trend of "mass entrepreneurship and innovation" to guide enterprise innovation.Provide a reference for real optimization of resource allocation.