Innovation Effort and Ceo’s Characteristics

Abstract

The current study analyses how CEO’s attributes could influence innovation. It is drawn on all listed firms on the SBF120 1 index between 2001 and 2013. Proxies for innovation effort are the ratio of R&D spending and the number of researchers/scientists per R&D team. First, we find that the CEO’s education background could influence innovation effort. Specifically, when CEOs have a science or an engineering degree, unlike business and management educated CEOs, they are more inclined to increase R&D spending. These effects are pronounced in innovative firms operating in sectors where innovation is not the heart core of their businesses. Also, we show that CEOs’ profile influence firms’ innovation investment only in non-technological industries. In high technological firms, attributes’ differences between CEOs are very small which may be due to high competition between firms listed on the SBF120 index. Finally, our results on the influence of gender diversity on boardrooms in Tech firms are consistent with the risk-avoidance hypothesis according to which women are risk averse agents.

Green finance policy and enterprise green development: Evidence from China

“…As the primary decision‐makers within an enterprise, managers hold the authority to allocate the organization's resources (Loukil et al, 2020; Wiersema & Bantel, 1992; Zona, 2016). The financial background of managers can impact their comprehension of national financial policies, subsequently influencing the formulation of the enterprise's development strategy.…”

CEO Overconfidence and Corporate Innovation Outcomes: Evidence From China

“…Based on prior literature, we control for firm size, financial characteristics, corporate governance characteristics, stock market trading characteristics, nature of ownership, and other characteristics of the enterprise. We add control variables to capture firm size, performance effects and other financial characteristics, such as asset size (SIZE), the asset liability ratio (LEV), capital intensity (INTEN), fixed assets (FIXED_ASSET), operating income before depreciation (ROA), net operating cash flow (CASH_FLOW), retained earnings ratio (RE_EARNING), the growth rate of operating income (GROWTH), annual earnings per share (RET), the annual volatility of the stock price (VOLATILITY), ownership concentration (OWNCON), and the executive shareholding ratio (EXCHH) (Frost, 1997;Healy and Palepu, 2001;Ben-Amar and Zeghal, 2010;Lee et al, 2016;Loukil et al, 2020;Huang and Yuan, 2021). In addition, we add other control variables, such as the percentage of independent directors (INDEP) (Jiraporn et al, 2018) and the number of board meetings held each year (MEETING), to capture the firm's internal control level.…”

“…Prior studies (Tang and Peng, 2003;Chen, 2013) have introduced a lag structure into the models to account for the time lag between CEO decisions and proxies for firm innovation. Following Balsmeier et al (2014) and Loukil et al (2020), we consider a 1-year lag 3 presents the Pearson correlation coefficients for the main variables used in our regression analysis. The correlation between innovation (LN_CITATIONS) and CEO overconfidence (OVER_CONFIDENCE) is significantly positive, which is consistent with the argument that overconfident CEOs courage firm innovation.…”

“…It is well recognized that innovation is vital for a firm's growth and long-term competitive advantage (Porter, 1992;Loukil et al, 2020). Chief Executive Officer (CEO) overconfidence is considered to be highly related to firm innovation since overconfident CEOs are likely to take risks, address challenges, and implement corporate changes such as investing in R&D activities (Malmendier and Tate, 2005a,b;Galasso and Simcoe, 2011;Hirshleifer et al, 2012;Nowak, 2018).…”

Gender on Board and the Impact to Firm Performance through Innovation as Mediating Variable: Evidence from Indonesian non-Financial Firms

“…Innovation is a process conducted by a company to develop new products, services, thoughts, and business processes (Kotler and Keller 2009). Based on Loukil et al (2020), innovation is measured using R&D expenditure divided by total assets. Innovation was measured in one year after the board of directors took office (t + 1) because the directors' decisions for innovation require time to introduce organizational change (Loukil et al 2020;Barker III and Mueller 2002).…”