Executive pay restrictions and R&D investment

IF 4.2 2区管理学 Q1 BUSINESS, FINANCE

Management Accounting Research Pub Date : 2025-03-17 DOI:10.1016/j.mar.2025.100929

Ziwei Song , Lin Wang , Dengjin Zheng

引用次数: 0

Abstract

In response to the debate on restricting executive compensation, this study investigates the impact of executive pay caps on investments in research and development (R&D). Exploiting the 2014 pay restriction scheme for SOEs in China as a natural experiment, we find that R&D investment in SOEs grow slower than in non-SOEs following the scheme’s implementation, with the effect mainly observed in the expensed component of R&D. Consequently, SOEs experience a decrease in innovation quality and firm value after the executive pay restriction is imposed. Reflecting the role of political advancement as a substitutive incentive device in SOEs, we find the negative impacts of the pay restriction are lessened by political promotion incentives. Overall, our findings suggest policymakers should be cautious when implementing restrictive pay policies, as it may reduce executives’ incentive to pursue innovation efforts.

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高管薪酬限制和研发投资

针对限制高管薪酬的争论，本研究调查了高管薪酬上限对研发投资的影响。利用2014年中国国有企业薪酬限制制度作为自然实验，我们发现，在该制度实施后，国有企业的研发投资增长速度慢于非国有企业，而且这种影响主要体现在研发费用部分。因此，在高管薪酬限制实施后，国有企业的创新质量和企业价值有所下降。我们发现，在国有企业中，政治晋升作为一种替代激励手段，可以减轻薪酬限制的负面影响。总体而言，我们的研究结果表明，政策制定者在实施限制性薪酬政策时应谨慎，因为这可能会降低高管追求创新努力的动力。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Management Accounting Research Multiple-

CiteScore

7.10

自引率

4.30%

发文量

期刊介绍： Management Accounting Research aims to serve as a vehicle for publishing original research in the field of management accounting. Its contributions include case studies, field work, and other empirical research, analytical modelling, scholarly papers, distinguished review articles, comments, and notes. It provides an international forum for the dissemination of research, with papers written by prestigious international authors discussing and analysing management accounting in many different parts of the world.