Double Track Compensation Contract for Executive Team and Innovation of State-owned Enterprises
The existing research believes that the lack of incentive mechanism is the fundamental reason for the loss of innovation efficiency of state-owned enterprises,but it is mainly based on the assumptions of property rights reform and the single track compensation contract for executives,ignoring the question of whether the innovation of state-owned enterprises can be improved only by changing the design of executives'compensation contracts without changing the nature and status of state-owned enterprises.Based on the realistic background of the reform of the dual track compensation system for executives,this paper empirically explores the impact of the dual track compensation contract on the innovation of state-owned enterprises by manually collecting the data of state-owned listed companies from 2007 to 2020.The research find that the dual track compensation contract for executives team has a significant positive impact on the innovation output of state-owned enterprises,and it is realized through the mechanism of reducing agency costs and enhancing the risk-taking capacity.The above research conclusions are still valid after adopting various robustness tests such as Heckman test,propensity score matching,instrumental variable method,fixed effect model and excludes the alternative explanation of mixed ownership reform.The results of in-depth test show that the dual track compensation contract for executive team can promote the innovation output of different types of state-owned enterprises;When a professional manager holds the position of CEO,it will help to play the role of dual track compensation contract in promoting the innovation output of state-owned enterprises.Further research shows that in local or highly competitive industry state-owned enterprises,and after the promulgation of the Guiding Opinions,the dual track compensation contract has a more significant positive impact on the innovation output of state-owned enterprises.The value effect study shows that the promotion effect of the dual track compensation contract on the innovation of state-owned enterprises can eventually bring about the improvement of the current and future value of the company,which has a long-term value promotion function.From the perspective of dual track compensation contract design for executive team,this paper not only responds to the theoretical controversy of"privatization",but also verifies the limitations of single track compensation contract design for executives,and provides reference and supplement for the current reform of state-owned enterprises.The specific management implications are as follows:First,the state-owned assets supervision institution can guide the reform practice of state-owned enterprises by optimizing the design of the dual-track compensation contract for executive team.The dual-track compensation contract for executives team is more effective in improving the innovation level of state-owned enterprises in local or highly competitive industry state-owned enterprises,which indicates that the design of dual-track compensation contract for executives team may be an important supplementary way in the reform of state-owned enterprises in China,especially for the incentive problems that are difficult to solve in the reform of local competitive state-owned enterprises.Second,when state-owned enterprises implement the dual-track compensation system for executive team,the central and local governments also need to take into account the actual situation of state-owned enterprises.comprehensively consider the governance level of state-owned enterprises,what positions and powers are given to professional managers,the dual-track compensation gap,the degree of government intervention and other factors,and design a reasonable dual-track compensation contract for executive team and its mechanism to play a role in promoting the innovation of state-owned enterprises.Third,state-owned enterprises can achieve effective incentives for executives through the design of dual-track compensation contracts,and promote the high-quality development of state-owned enterprises.
executive teamdual track compensation contractinnovation of state-owned enterprisesagency costsrisk-taking
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