Manufacturing is the foundation of a nation and the cornerstone of a strong country, serving as the lifeblood of the national economy. It plays an irreplaceable role in driving economic development and participating in international competition. Innovation and R&D are the "key link" in the high-quality development of manufacturing, and R&D investment must be placed at the core of manufacturing development. The amount of R&D investment largely depends on the business decisions of corporate executives, which are influenced by the design and implementation of executive compensation incentives. It may also be related to corporate financial performance, as the quality of financial performance directly affects a company's survival and development, as well as its ability to secure sufficient funds for R&D innovation and compensation incentives. This paper uses a sample of 1,089 Chinese A-share manufacturing listed companies from 2019 to 2023, combined with relevant domestic and international literature, to empirically examine the relationships between executive compensation, R&D investment, and financial performance using Stata software. Descriptive statistical analysis, correlation analysis, and regression analysis are conducted. The results show that: executive compensation has a significantly positive correlation with financial performance; R&D investment has a significantly negative correlation with financial performance in the short term; the impact of R&D investment on financial performance exhibits a lag effect, with the negative correlation gradually weakening in the first and second lag periods; and executive compensation has a significant positive moderating effect on the relationship between R&D investment and financial performance.

Linyu Fan. R&D Investment, Executive Compensation and Financial Performance—Evidence from Chinese A-share Manufacturing Listed Companies. Academic Journal of Business & Management (2025), Vol. 7, Issue 9: 35-41. https://doi.org/10.25236/AJBM.2025.070906.

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