The Promotion Effect of Executive Compensation Stickiness on Corporate R&D Investment: Empirical Evidence Based on PSM

Abstract

The impact of executive compensation stickiness on corporate R&D investment behavior is a new issue in the financial and financial field. A small amount of literature has analyzed the above issues, but they have ignored the possible adverse effects of sample selection bias on the research results. This paper takes the 2008-2016 China Shanghai and Shenzhen A-share listed companies as the research samples, uses propensity score matching (PSM) to empirically test whether the executive pay viscous significantly promotes R&D investment. The study found: under the premise of controlling sample selection bias, the R&D investment level of the executives with sticky and high-viscosity group is significantly higher than that of the sample companies with no sticky and low-viscosity groups. As a kind of salary incentive mechanism with failure tolerance characteristics, executive pay sticky has a significant promotion effect on Chinese R&D investment. Further research has also found that, especially for non-state-owned enterprises and high-tech enterprises, executive compensation stickiness has a stronger effect on corporate R&D investment.