Individualistic CEO and Corporate Innovation: Evidence from U.S. Frontier Culture
51 Pages Posted: 27 Oct 2021 Last revised: 9 Nov 2021
Date Written: October 27, 2021
This paper examines the relationship between CEOs’ individualistic cultural background and corporate innovation among firms in the United States. Using hand-collected data on birthplaces of US-born CEOs, we provide robust evidence that CEOs born in frontier counties with a higher level of individualistic culture promote innovation performance. Firms led by such CEOs increase both quantity and quality of innovation outputs, measured by the number of patents, citation-weighted patents, and the market value of patents, and focus more on breakthrough innovation. Our extended analysis suggests that CEOs with an individualistic background tend to build an innovation-oriented corporate culture and to accumulate human capital by increasing the inflow of inventors, thus promoting corporate innovation.
Keywords: Innovation; Culture; Individualism; Frontier History
JEL Classification: G30; O31; O32; M14; N9
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