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Top executive tournament incentives and corporate innovation output

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  • Xianjun Cai
  • Huifeng Pan
  • Chengcheng Gao
  • Chunyang Wang
  • Liping Lu

Abstract

We examine the impact of tournament incentive on corporate innovation output in China. Using a sample of Chinese listed firms during 2007–2015, we find that tournament incentives have a positive effect on the quantity and quality of innovation output. This relationship is more pronounced in the context of a higher probability of promotion, e.g. prior to CEO turnover. Besides, this effect is stronger for private firms than for state‐owned enterprises (SOEs). Our results are robust to instrumental variable regression and other robustness checks. The paper casts light on the role of tournament incentives on corporate executives for policymakers to enhance corporate innovation.

Suggested Citation

  • Xianjun Cai & Huifeng Pan & Chengcheng Gao & Chunyang Wang & Liping Lu, 2021. "Top executive tournament incentives and corporate innovation output," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(5), pages 5893-5924, December.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:5:p:5893-5924
    DOI: 10.1111/acfi.12850
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    References listed on IDEAS

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    Cited by:

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    2. Zhaozhen Zhu & Yijia Guo & Zhao Jiang & Xiaojun Chen, 2023. "The Perspective of Long-Term and Short-Term Incentives on the Business Environment, Executive Incentive Contracts, and Enterprise Innovation," SAGE Open, , vol. 13(4), pages 21582440231, November.

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