IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v16y2025i2d10.1007_s13132-024-02189-0.html
   My bibliography  Save this article

Executive Compensation Structure, Economic Cycle, and R&D Investment

Author

Listed:
  • Xuelian Zuo

    (Zhejiang Yuexiu University)

  • Shiwen Luo

    (Zhejiang Financial College)

  • David Yoon Kin Tong

    (International University of Malaya-Wales)

Abstract

The purposes of the paper are as follows: First, explore the impact of executive compensation structure on enterprise research and development (R&D) investment. Second, examining the impact of economic cycle on R&D investment and its effect on the relationship between executive compensation structure and R&D investment in China. Empirical verification is carried out utilizing multiple regression analysis and based on the panel data collected from A-share listed companies in China from 2007 to 2014. The study delivers findings as follows: The higher the proportion of equity return in total executive compensation, the more executives are motivated to consider the enterprise’s long-term value and thus are motivated to increase enterprise R&D investment. Such a relationship is more significantly observed in state-owned enterprises. R&D investment is countercyclical, and the economic cycle weakens the incentive effect of the executive compensation structure on enterprise R&D investment. This study provides a reference to guide China’s listed companies in preparing executive compensation contracts and improving the corporate governance system and a reference to guide the government in supporting R&D investment projects under the current circumstances.

Suggested Citation

  • Xuelian Zuo & Shiwen Luo & David Yoon Kin Tong, 2025. "Executive Compensation Structure, Economic Cycle, and R&D Investment," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 8394-8419, June.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02189-0
    DOI: 10.1007/s13132-024-02189-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-024-02189-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-024-02189-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02189-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.