SENIOR EXECUTIVES’ INCENTIVE, R&D INVESTMENT AND FIRM PERFORMANCE——THE MODERATING EFFECT OF MANAGERIAL DISCRETION
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Abstract
In order to better alleviate the contradiction of inconformity between the goals of senior management and shareholders in corporate governance and to enable enterprises to achieve better performance in the fierce market competition, this paper collected data samples of 1, 454 listed Chinese manufacturing enterprises and used Generalized Estimating Equations (GEE) to conduct multiple regression analysis on the research models. The results showed that the implementation of executive incentives could significantly promote research and development (R&D) investment and improve the firms’ performance. Furthermore, it could verify that certain management discretion could strengthen the influence of R&D investment on the firms’ performance. This would indicate that effective executive incentives and appropriate management discretion would provide strong support
for the enterprises to build core competitiveness.
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