| Variable | Definition |

Dependent variable | Patent | Ln (patent applications + 1) |

Patenti | Ln (patents for invention + 1) | |

Patentud | Ln (utility models + appearance designs + 1) | |

Independent variable | Teamgap | Ln (the average compensation oftop three executives − the average compensation of other executives) |

Control variable | Size | Ln (total assets) |

Lev | Debt-to-assets ratio | |

Top1 | The shareholding ratio of the largest shareholder | |

CF | The net cash flow/Total assets | |

Age | Ln(age of establishment) | |

Tangibility | Fixed assets/Total assets | |

Roa | Net profit/Total assets | |

Dual | If the chairman and CEO are integrated, equals to 1, otherwise to 0 | |

Indepen | The number of independent directors/The number of directors | |

SOE | If it’s state-owned enterprise, equals to 1, otherwise to 0 | |

KZ | The index of financing constraints | |

Year | Year dummy variable | |

Industry | Industry dummy variable |