Equity incentive is treated as an essential tool to offset the conflict in the R&D expenditure decision, but the existing evidence is contradictory. Based on the perspective of incentive heterogeneity, this paper introduces two new characteristics of equity incentive which are the equity value share price sensitivity and equity value price volatility sensitivity. We firstly study the driving mechanism of equity incentive on R&D expenditure and the different mechanism among restricted stocks and options, and then do an empirical test with the data from 2006 to 2012. This paper finds equity incentive includes opposite impacts on R&D expenditure which are the risk aversion effect and the incentive effect. The ultimate driving force depends on the relative magnitudes of the two effects. Moreover, the restricted stock holds significantly stronger risk aversion effect and significantly weaker incentive effect than the option. This paper also finds that the extent of market competition, the property rights and the grant motive moderate the two effects.