Influence of executive compensation incentives on corporate R&amp;D efficiency

Science Research Management ›› 2015, Vol. 36 ›› Issue (9) : 26-35.

Influence of executive compensation incentives on corporate R&D efficiency

Chen Xiude¹, Liang Tongying², Lei Peng², Qin Quande³

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Abstract

Scholars have always attached great importance to studying the relationship between executive compensation incentives and corporate financial performance, but ignore the potential impact of executive compensation incentives on corporate R&D efficiency. Based on the R&D data of Shanghai and Shenzhen A-share industrial listed companies from 2004 to 2012, this paper applies the true random-effects stochastic frontier model which proposed by Green(2005) to test the impact of monetary remuneration and equity incentive on R&D efficiency under the control of individual heterogeneity. Empirical evidence shows that there is an inverted U-shaped relationship between equity incentive and R&D efficiency, and the monetary remuneration has a significant positive impact on R&D efficiency. Further study also shows that the association between executive compensation incentives and R&D efficiency is not constant, and it will be affected by regional marketization, ownership and industrial characteristics.

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monetary remuneration / equity incentive / R&D efficiency / true random-effects stochastic frontier model

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Chen Xiude, Liang Tongying, Lei Peng, Qin Quande. Influence of executive compensation incentives on corporate R&D efficiency[J]. Science Research Management. 2015, 36(9): 26-35

References

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