TY - JOUR
T1 - Strategic decision making for boosting innovation and TMT compensation in high-tech industry
T2 - Evidence from China
AU - Usman, Muhammad
AU - Xiao, Shufang
AU - Luo, Dan
AU - Liu, Ningyue
N1 - Publisher Copyright:
© 2018 Inderscience Enterprises Ltd.
PY - 2018
Y1 - 2018
N2 - This study investigates whether total, accounting-based and stockbased compensation packages for top management teams (TMTs) impact firms' total, internal R&D and external buying behaviour of getting new technology. Total innovation behaviour, internal R&D behaviour and external buying behaviour are examined across a sample of 86 A-share listed companies from the Chinese high-tech sector from the period 2009 to 2015. After controlling endogeneity issues, firm size, cash flow and various other firm characteristics, the results of three stage-least-square regressions (3SLS) analysis show that TMT total compensation is positively related to total innovation policy. Furthermore, the results of accounting based and stock based compensations suggest that when TMT compensation is heavily based on accounting performance, companies prefer to buy new technology through external sources and avoid internal R&D, whilst TMT compensation skewed more towards riskbased stock compensation encourages internal R&D and discourages external new technology acquisition.
AB - This study investigates whether total, accounting-based and stockbased compensation packages for top management teams (TMTs) impact firms' total, internal R&D and external buying behaviour of getting new technology. Total innovation behaviour, internal R&D behaviour and external buying behaviour are examined across a sample of 86 A-share listed companies from the Chinese high-tech sector from the period 2009 to 2015. After controlling endogeneity issues, firm size, cash flow and various other firm characteristics, the results of three stage-least-square regressions (3SLS) analysis show that TMT total compensation is positively related to total innovation policy. Furthermore, the results of accounting based and stock based compensations suggest that when TMT compensation is heavily based on accounting performance, companies prefer to buy new technology through external sources and avoid internal R&D, whilst TMT compensation skewed more towards riskbased stock compensation encourages internal R&D and discourages external new technology acquisition.
KW - Accounting based pay
KW - Innovation strategies
KW - Stock based pay
KW - Strategic decisions
UR - http://www.scopus.com/inward/record.url?scp=85051412346&partnerID=8YFLogxK
U2 - 10.1504/IJTPM.2018.093854
DO - 10.1504/IJTPM.2018.093854
M3 - Article
AN - SCOPUS:85051412346
SN - 1468-4322
VL - 18
SP - 247
EP - 271
JO - International Journal of Technology, Policy and Management
JF - International Journal of Technology, Policy and Management
IS - 3
ER -