Research On The Influence Of Executive Equity Incentive On Enterprise’s Technological Innovation Performance

Technological innovation is the key to realize economic development.It is not only an important factor to help enterprises obtain key competitive advantages,but also conducive to promoting the high-quality development of China’s economy.Under the background of pursuing high-quality development,China’s technological innovation development is not sufficient,Therefore,it urgently needs to adjust and optimize China’s economic structure,development power and mode,so as to continuously improve the technological innovation ability to obtain the core competitive advantage.As the most active subject in the market economy,enterprises shoulder the important mission of improving technological innovation performance.However,affected by the separation of the two rights of modern enterprises,the interests of shareholders and executives are usually inconsistent,which will induce agency conflicts,increase agency costs,and then restrict the improvement of technological innovation performance.As an important driving force to guide executives to take the initiative in technological innovation,executive equity incentive is very valuable to reduce agency costs and get the technological innovation performance improved.Meanwhile,as the key way for the capital market to play its role,stock liquidity,as the key way for the capital market to play its role,also has a certain endogenous relationship with technological innovation.Then,what impact will executive equity incentive have on technological innovation performance,how will it affect technological innovation performance,and what role will stock liquidity have on the relationship between them?This paper combines theoretical research with empirical test.Firstly,it sorts out and analyzes the domestic and foreign research results on executive equity incentive,agency cost,stock liquidity and technological innovation performance,which provides relevant basis for the research of this paper.Secondly,based on principal-agent theory,human capital theory,liquidity premium theory and enterprise innovation theory,this paper analyses the influence of executive equity incentive on technological innovation performance.Meanwhile,regards agency cost as an intermediary variable to deeply study the intermediary role of agency cost between them.At the same time,taking stock liquidity as the regulating variable,this paper further analyzes the regulating role of stock liquidity between them.Finally,regarding the data of A-share listed companies in Shanghai and Shenzhen as research target,this paper studies the relation between executive equity incentive and technological innovation performance,agent cost’s intermediary role,and the regulating role of stock liquidity,this paper does an empirical test.The empirical results show that:(1)Executive equity incentive has an inverted U-shaped impact on technological innovation performance;(2)Agency cost functions as an intermediary role between executive equity incentive and technological innovation performance.Further analysis shows that the intermediary role of agency cost is a masking effect,which means that agency cost masks the inverted U-shaped impact of executive equity incentive on technological innovation performance to some extent;(3)The stock liquidity can weaken the inverted U-shaped influence of executive equity incentive on technological innovation performance,that is,with the increase of stock liquidity,the positive promoting effect and negative inhibiting effect of executive equity incentive on technological innovation performance are both weakened.Further analysis shows that the moderating effect of stock liquidity on the inverted U-shaped relationship between executive equity incentive and technological innovation performance needs to be partially mediated by agency cost,in other words,the moderating effect of stock liquidity is partially mediated by agency cost.The research conclusion of this paper shows that the more equity incentives for executives,the better,and scientific and reasonable equity incentive for executives is the effective mechanism to improve the technological innovation performance of enterprises.At the same time,it is necessary to pay more attention to stock liquidity,fully stimulate the positive influence of stock liquidity on the relationship between executive equity incentive and technological innovation performance,and weaken its negative influence.This will help Chinese listed companies to improve their corporate governance structure,thus providing empirical reference for guiding listed companies to improve the performance of technological innovation and promote the high-quality development of national economy.