Abstract:With the continuous promotion of China's R&D innovation policy, more and more enterprises increase R&D investment, but the R&D capitalization expenditure reflecting the transformation ability of independent innovation has not improved. Based on the data of listed enterprises in China’s A-share market as sample from 2007 to 2018, this paper studies the impact of managers on R&D innovation investment of enterprises from the perspective of managerial entrenchment, and whether equity incentive can play a governance role in managers' R&D investment decisions. The results show that managerial entrenchment of managers has a significant positive impact on R&D investment, but a significant negative impact on R&D capitalization, which shows that managers' R&D investment decisions have a certain catering to the trend of innovation; in addition, equity incentive negatively moderates the positive relationship between managerial entrenchment and R&D investment, which confirms that the governance effect of equity incentive on managers' R&D innovation investment decision. Finally, the paper puts forward some suggestions on optimizing enterprise R&D investment decisions from the aspects of government R&D innovation policy formulation, enterprise R&D innovation information disclosure and effective equity incentive measure implement, and so on.