Abstract: Executive performance evaluationis an important system to optimize the corporate governance of state-owned enterprises. “R&D investment as profit”, this innovation of executive performance evaluation system, is of great significance to the high-quality development of state-owned enterprises.“R&D investment as profit” in the Assessment Measuresis taken as the entry point to investigate its impact on Economic Value Added (EVA).Based on this, time-varying difference in differences (DID) method is used to test the quasi-experiment.The results show that: (1) The evaluation systemof “R&D investment as profit” significantly improves the performance of state-owned enterprises, and the results are still stable after a series of tests, among which executive compensation incentive plays a mediating role;(2) Compared with non-competitive state-owned enterprises, performance improvement of competitive state-owned enterprises is more obvious. Capital-intensive state-owned enterprises are more sensitive to the “R&D investment as profit” evaluation system. The conclusion can provide theoretical support for the continued promotion of “R&D investment as profit” evaluation system.

Key words: performance evaluation, “R&D investment as profit” system, executive incentive, difference in differences