Financialization Of Manufacturing Enterprises,Executive Incentive And R&D Investment

Manufacturing industry is the mainstay of the national economy,and technological innovation ability is the key to the development of manufacturing industry.It is not only related to the competitiveness of enterprises,the improvement of enterprise efficiency,and the future sustainable development of enterprises,but also related to the status of countries in the global division of labor and trade system.Therefore,the independent innovation ability of manufacturing enterprises has been widely concerned by the society.R & D investment is the necessary support of independent technological innovation.Recently,financial investment and real estate industry continued to boom,with considerable returns;on the contrary,with the slowdown of China ’ s macro-economic growth rate,most enterprises are suffering from fierce competition,rising operating costs and overcapacity.The profit space is gradually low,and the industrial investment rate is gradually declining.In order to achieve the improvement of short-term performance,some enterprises are forced to adjust the original investment profit model,transfer funds to the financial market to seek new profit growth points driven by abundant profits,and drive the overall business performance of enterprises,thus squeezing out the investment originally applied to the improvement of the main business and the R & D of product technology.The R & D investment of enterprises is affected by the influence that cannot be ignored.As a key planner and implementer of modern corporate innovation strategies,senior management plays an important role in facilitating R&D investment and is also a major contradiction in the principal-agent problem of corporations.It is reasonable to introduce the executive incentive system to adjust the adverse impact of the financialization of manufacturing enterprises on R & D investment.Generally speaking,the separation of ownership and management in the enterprise system is very common.Shareholders pay more attention to the long-term development of enterprises and hope that management will take more into account the long-term good of enterprises;the management pays more attention to the short-term performance level,and tends to maximize their sweat and achievements through diversified operation and multi-channel investment.It is the conflict of interest views that leads to differences in business philosophy.Managers are more inclined to pursue high returns in the financial market and reduce R & D investment of enterprises.This short-term investment behavior seriously damages the rights and interests of shareholders.The introduction of a reasonable corporate governance mechanism can effectively reduce the agency cost caused by the separation of the two rights,guide the management to reduce short-sighted behaviors,and be more motivated to make efforts to maximize the long-term value of enterprises.Therefore,this paper introduces executive equity incentive and executive compensation incentive to explore their moderating effects on the relationship between financialization of manufacturing enterprises and R & D investment.In this paper,we select financial data of A-share listed companies in Shanghai and Shenzhen,China from 2013 to 2020 as an example and use a fixed effects model to learn the impact of financialization of manufacturing companies on R&D investment.At the same time,we break down financial investments into long-term and short-term overall comparisons according to the motives for investing and the liquidity of the financial investments held by companies and examine the role differences.Then,the executive equity incentive and executive compensation incentive mechanisms at the corporate governance level are introduced to examine whether the moderating effect exists and their respective mechanisms of action;Finally,the data is divided into state-owned and non-state-owned groups,investigating whether the above mechanisms differ between different types of companies,and developing strategies for allocating financial assets and management incentives to companies of different ownership.And provides a reference to implement.The conclusions are as follows :(1)The financialization of entity manufacturing enterprises has a significant inhibitory effect on R & D investment,which significantly squeezes out the R & D innovation investment of enterprises;(2)Dividing financial assets into short-term and long-term based on the different liquidity of financial assets held by enterprises,it is found that even short-term financial assets held by enterprises with strong liquidity cannot provide significant cash flow support for R & D investment,and the so-called ’ reservoir effect ’ is not confirmed;the long-term financial assets with poor liquidity have more obvious crowding-out effect on R & D investment and inhibit R & D investment.(3)Combined with the level of corporate governance mechanism,from the two dimensions of executive compensation incentive and executive equity incentive,it is concluded that executive compensation incentive mechanism significantly strengthens the inhibitory effect of manufacturing enterprise financialization on enterprise R & D investment,and plays a negative moderating effect;The incentive mechanism for executives effectively weakens the restraining effect of R & D investment by monetization of the manufacturing industry,and produces a positive easing effect.(4)The samples are grouped and compared according to the type of company ownership.The above conclusions still prove to be valid,regardless of whether the companies are state or non-state.The financialization of the manufacturing industry has a significant constraining effect on R&D investment.And in the negative correlation between the two,the weakening effect of the stock incentive mechanism is more pronounced in non-state enterprises,due to the conflict between management’s short-term interests and long-term development enterprises can be overcome;the empowerment effect of executive compensation incentives is more pronounced in state-owned enterprises,which strengthens the self-interested and short-sighted behavior of enterprise management,and makes its R & D investment willingness lower.This study is based on the latest financial data from the implementation of the manufacturing industry division standard in 2013 to 2020,and is innovative in exploring whether the holding of long-term and short-term financial assets will have different impacts on R & D investment due to different motivations based on the horizontal and systematic comparison of capital saving motivation and speculative arbitrage motivation of enterprise financialization.At the same time,the introduction of executive equity and salary incentive as a moderator can comprehensively compare the different effects of executive incentive mechanism.This helps manufacturing improve the level of R&D investment and optimize the real investment behavior of manufacturing.Finally,based on the findings of the study,this paper makes suggestions from both manufacturers and government agencies.The manufacturing industry needs to carefully implement the company’s financing strategy and create an environment suitable for the company’s R & D activities through appropriate capital management.At the same time,executive incentive policies need to be optimized,especially if state-owned enterprises implement payroll incentive mechanisms.This requires attention to conflicts of interest caused by higher salary incentives.We will proactively provide fair incentives to NGO executives and R & D personnel to realize collaboration in business performance.The relevant government sector needs to speed up the improvement of the financial market system,improve the financial market system,maintain a stable and reasonable level of financial market revenue,and reduce arbitrage opportunities.At the same time,strengthen government leadership and supervision,actively counter arbitrage by financial speculation and manufacturing companies,increase R & D investment by companies,actively engage in exploratory innovation,and sustain high quality and high quality.Encourage and support the achievement of possible development.The company itself and the national economy.