Executive equity incentive and technological innovation

Abstract

Based on the classical agency theory and behavior theory, executive equity incentive has different impacts on company's technological innovation. Using a sample of 174 listed companies in China from 2006 to 2010 which have implemented the plan of equity incentive, we find that current value of executives equity incentive negative affects company's technological innovation intensity. In contrast, expected value of executive equity incentive has significant positive influence on company's technology innovation intensity. As executive equity cash increases, the influence of current value of equity incentive on company's technological innovation is weakened, as the impact of the expected value on technological innovation.