The Influence Of Equity Incentive On Enterprise Innovation

Innovation is an important means for enterprises to maintain their competitiveness and is also an important source of motivation to promote China’s economic development.At a time when market competition is becoming increasingly fierce and foreign sanctions are frequent,the question of how to promote corporate innovation and whether it can ultimately benefit enterprises through innovation is gradually becoming a focus of research.Since its widespread promotion in 2006,equity incentive has been widely used by listed companies because it can effectively solve the principal-agent problem and improve the internal governance level of enterprises.Many scholars believe that equity incentives can align the long-term interests of owners and operators,reduce agency costs,and promote corporate performance and enterprise value,but there is less research on the impact on the innovation ability of companies.Based on the relevant data of companies listed on GEM from 2010 to 2021,this paper studies whether equity incentive can stimulate the innovation ability of listed companies,how to better promote the innovation of listed companies and how innovation can really make enterprise income.The following conclusions are drawn:(1)equity incentive can improve the innovation ability of listed companies,and the greater the intensity of equity incentive,the stronger the promotion effect;(2)Equity incentive has improved the two types of innovation level of listed companies;(3)Equity incentive has no innovation incentive effect on state-owned enterprises,but equity incentive can promote the innovation level of non-state-owned enterprises;(4)The effect of using stock option to promote the innovation of listed companies is better than that of using restricted stock;(5)The stronger the difference of incentive intensity between core employees and executives,the greater the role of equity incentive in promoting the innovation ability of listed companies;(6)Equity incentive can improve the innovation ability of listed companies by reducing the agency cost of listed companies;(7)Strong external supervision can promote the equity incentive of listed companies to improve their innovation ability;(8)The improvement of innovation ability brought by equity incentive can further promote the improvement of enterprise performance.Finally,this paper studies Sun Grow Co.,Ltd,,a typical gem enterprise,to corroborate its findings through a case study.