Research On The Influence Of Executive Incentive On Enterprise Innovation Investment

China is in a painful period of economic transformation.In 2016,the State Council and the Central Committee of the CPC jointly issued the national innovation driven development strategy outline,which proposed that only innovation can provide new support for China’s economic development in the current situation of the weakening of traditional economic model and the weak development of extensive economic growth.And the enterprise is the motive force and pillar of the social and economic development,and the main body of innovation.The outline clearly points out that enterprises should be encouraged to innovate to enhance the innovation ability of product and industries,and that innovation should be promoted to the height of national security.However,relevant data show that although the growth of innovation investment in enterprises is not up to the ideal height,there is still a large room for rise.The existing research starts with the internal mechanism of the enterprise,and points out that the decision-making of enterprise innovation cannot be separated from the role of senior executives.As the main decision-maker of enterprise innovation,senior executives are responsible for the specific direction of innovation and directly affect the choice of enterprise innovation,so it is necessary to effectively motivate the senior executives.Because of the high professional and risk of innovation itself,it puts forward higher requirements for the ability level of enterprise innovation decision makers.The theory of high-level echelon points out that the managers’ cognition will have a significant impact on the strategic decision-making of the company.However,because the managers are difficult to analyze the information comprehensively,they will often be interfered by their own characteristics(background,experience,age,etc.),and then affect the specific strategic decision-making behavior of the enterprise.Under this background,it is of practical significance to carry out relevant research.This paper takes the data of listed companies of A-share from 2011 to 2019 as the research sample,and empirically analyzes the relationship between executive incentive and enterprise innovation investment;then constructs the interaction term between the characteristics proportion of senior management team and the incentive of senior management,and brings the model into regression analysis to further explore the regulatory role of different proportion of senior management team characteristics in the process of the impact of senior management incentive on innovation investment;secondly,the paper discusses the effect of senior executives’ incentive on innovation investment under different property rights by combining with the heterogeneity of enterprise property rights;finally,combining with the above series of studies,the paper concludes that: firstly,the incentive of senior executives is significantly positively correlated with the investment in innovation and the effect of executive compensation is more significant;secondly,the proportion of overseas background executives in the senior management team is significantly related to the investment in innovation of enterprises,but the increase of overseas background executives will weaken the promotion of executive equity incentive on innovation investment.Increasing the proportion of senior executives with financial background in the senior management team can promote the promotion of executive compensation incentive on innovation investment.With the increase of senior management team age,the promotion effect of executive equity incentive on innovation investment is weakened;thirdly,in nonstate-owned enterprises,executive incentive is positively related to enterprise innovation investment,but in state-owned enterprises,the effect of executive incentive is not significant.Based on the above research,the following suggestions are put forward: firstly,improve the incentive system of senior management,adopt flexible and diverse salary and equity incentive methods to promote the growth of innovation investment;secondly,increase the proportion of executives with overseas background,especially those with overseas working background.At the same time,the increase of the proportion of senior executives with overseas background will weaken the effect of equity incentive,so it is necessary to further strengthen the localization of executives with overseas background and relax the restrictions on their daily operation and management;thirdly,improve the team structure,increase the proportion of senior executives with financial background and young executives.Meanwhile,according to different characteristics of senior management team,combined with the preference of senior management team,we should implement selective and differentiated incentive mode,the higher the proportion of senior executives with financial background is,the more suitable salary incentive is;the long-term equity incentive can strengthen the incentive effect when the management team is younger;fourthly,the state-owned enterprises should be reformed to be de administrated and the enterprise management should be implemented to give full play to the role of senior management.