Using panel regression models with data from Chinese A-share listed companies from 2010 to 2020, this paper empirically examines the impact of executive compensation incentives on corporate innovation investment, and further investigates the moderating effects of government subsidies and financing constraints, as well as the mediating role of risk-taking. The findings indicate that executive compensation incentives significantly promote corporate innovation investment. Government subsidies strengthen this promotional effect, whereas financing constraints weaken it. Risk-taking plays a partially mediating role between the two. Heterogeneity analysis reveals that the promoting effect of executive compensation incentives on innovation investment is more pronounced in non-state-owned enterprises and high-tech enterprises. This study provides insights for optimizing incentive mechanisms and enhancing innovation motivation from a corporate governance perspective.
Fangzhou et al. (Wed,) studied this question.