How Does Equity Incentive Improve The Stated-owned Enterprises’ Innovation?

Enterprises and governments pay more and more emphasis on improving innovation capability and level,and so as China.This is due to innovation’s great significance to improve the core competitiveness of enterprises and promote the long-term development of social economy.Meanwhile,the reform of state-owned enterprises has always been an important issue concerned by our society.At present,the mixed ownership reform of state-owned enterprises has taken a series of measures including equity incentive.Under this context,this paper studies the impact of equity incentive on innovation in state-owned enterprises.Firstly,this paper briefly introduces the basic situation of equity incentive and innovation research at home and abroad,and on this basis,combs out the theoretical basis of equity incentive and innovation.Equity incentive theory includes principal-agent theory,human capital theory,management incentive theory,property right theory and incomplete contract theory.Among them,management incentive theory mainly introduces reinforcement theory,expectation theory and mechanism design theory;innovation related theory mainly includes Schumpeter’s innovation theory and Romer’s endogenous economic growth theory.Secondly,this paper makes an empirical study on the impact of equity incentive on innovation in state-owned enterprises.Three possible ways for equity incentive to affect state-owned enterprise innovation are proposed,and multiphase difference-in-difference method and parallel multiple mediation model are used to verify the basic hypothesis.In addition,this paper further analyzes the heterogeneity of different incentive methods,different regions and types of state-owned enterprises,the regulatory role of monopoly power,and the impacts of equity incentive on the performance of state-owned enterprises.Finally,on the basis of empirical analysis,this paper draws many conclusions as follows:(1)Generally speaking,the number of state-owned enterprises implementing equity incentive in China is relatively small,and most of them are concentrated in competitive industries;(2)although the promotion effect of equity incentive on innovation of state-owned enterprises is not as good as that of non-state-owned enterprises,it still has a certain positive effect,and this effect is mainly reflected in the application of invention patents;(3)instead of reducing agency costs and improving the risk-bearing capacity of state-owned enterprises,the implementation of equity incentive to promote innovation in state-owned enterprises mainly plays a role by increasing the intensity of R&D;(4)equity option can better improve state-owned enterprises’innovation;(5)equity incentive has a more obvious role in promoting innovation in the eastern region with higher level of economic development and marketization,and in the state-owned enterprises which the government is relatively holding shares;(6)the greater the monopoly power the state-owned enterprise masters,the less obvious the promotion effect of equity incentive on innovation;and(7)equity incentive not only can not improve the performance of state-owned enterprises,but also may have a negative impact.It should be pointed out,however,that the state-ownership identity itself is not the root of the low efficiency of state-owned enterprises.What is important is the relevant policies and systems on the governance of state-owned enterprises on this basis.State owned enterprises also need to pay attention to this point when implementing equity incentive.In order to give full play to the role of equity incentive in promoting the innovation of state-owned enterprises,we can start from the following points:(1)on the whole,we should make steady progress,step by step,constantly improve relevant supporting policies and measures,and strengthen the design of equity incentive scheme simultaneously;(2)fully consider the heterogeneity of different incentive tools,regions and the proportion of state-owned shares;(3)strengthen the supervision of state-owned enterprises that have gained monopoly power in the market;and(4)further improve the property rights system and decentralize the power of managers as appropriate.