Does Managerial Ability Drive Firm Innovativeness?

IEEE Transactions on Engineering Management (Forthcoming)

38 Pages Posted: 10 Jan 2020

Date Written: May 21, 2019


We investigate the impact of managerial ability on firm innovativeness. We further investigate how managerial ability impacts the association between firm innovativeness and competitive advantage. We employ two measures of managerial ability, namely strategic managerial ability and operational managerial ability. We find that firm innovativeness rises with strategic ability at an increasing rate. However, firm innovativeness initially falls and then rises with an increase in operational ability. Our results are consistent with the notion that a firm’s innovation activity is a trade-off between opportunity exploration and exploitation in that explorative and exploitative activities compete for manager’s fixed attention. The greater the strategic ability of management, the more opportunity-focused they are, the greater is their risk tolerance, and the greater is the investment in R&D. Strategic managers seek and cultivate growth opportunities to resolve the uncertainty associated with the growth opportunities in the firm’s favor, which enhances the firm’s competitive advantage.

Keywords: firm innovativeness; strategic leadership; R&D; opportunity exploration; competitive advantage; managerial ability

JEL Classification: M21, M52, M12, M41, G30

Suggested Citation

Mishra, Chandra S, Does Managerial Ability Drive Firm Innovativeness? (May 21, 2019). IEEE Transactions on Engineering Management (Forthcoming), Available at SSRN:

Chandra S Mishra (Contact Author)

Florida Atlantic University ( email )

Boca Raton, FL 33431
United States

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