A Study on the Impact of Restricted Stock Incentives for Core Employees on Corporate Innovation Performance: Analysis of the Mediating Effect of Research & Development Investment

Min Wan; S. M. Ferdous Azam

doi:10.31181/ijes1612027299

Authors

Min Wan 1) School of Accounting, Nanjing University of Finance & Economics Hongshan College, Nanjing, 210000, China; 2) Graduate School of Management, Postgraduate Centre, Management and Science University, Shah Alam, Selangor, 40100, Malaysia Author https://orcid.org/0009-0009-9536-052X
S. M. Ferdous Azam Graduate School of Management, Postgraduate Centre, Management and Science University, Shah Alam, Selangor, 40100, Malaysia Author https://orcid.org/0000-0002-0001-3595

DOI:

https://doi.org/10.31181/ijes1612027299

Keywords:

Restricted stock incentives, Core employees, Research & development investment, Substantive innovation performance, Strategic innovation performance

Abstract

Innovation drives economic progress, with enterprises serving as the primary agents of innovation and talent as the foundation of enterprise innovation. Core personnel are directly engaged in enterprise research and development (R&D) activities and the implementation of R&D programs. Restricted stock incentives, as an internal incentive mechanism, can significantly enhance innovation among core employees. Using firm-year panel data, this study employs a fixed-effects model, supplemented by robustness checks and bootstrap mediation tests. It examines A-share listed companies in China from 2014 to 2024 to investigate the influence of restricted stock incentives for core employees on enterprise innovation performance and the potential mechanisms involved. The results indicate that restricted stock incentives (RSIs) for core employees are positively associated with substantive, strategic, and overall innovation performance. RSIs also promote R&D investment, which partially mediates their association with innovation performance. The positive effects are more pronounced among firms in eastern regions and state-owned enterprises. This study contributes to the literature on equity incentives and innovation by identifying R&D investment as an important transmission mechanism and demonstrating that the effectiveness of RSIs varies across organizational and regional contexts. The findings provide practical implications for managers and policymakers seeking to design equity-based incentive systems that support long-term innovation and sustainable corporate development.

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