Are Researcher CEOs Better Innovators?

78 Pages Posted: 29 Aug 2022 Last revised: 18 Dec 2022

See all articles by George J. Jiang

George J. Jiang

Washington State University

Wenquan Li

University of Queensland - Business School

Yaohua Li

University of Glasgow

He Wang

Southern University of Science and Technology

Date Written: December 17, 2022

Abstract

This paper investigates the impact of CEO research experience on corporate innovation. We show that firms managed by researcher CEOs have significantly higher investments in innovative activities and generate more innovation output. In addition, we show that researcher CEOs accomplish this improvement by increasing firms’ innovative effectiveness. In particular, CEO research experience has a substitution effect for hiring more R&D employees. Further evidence suggests that our results are mainly driven by CEOs’ work experience in research institutions. We employ CEO exogenous turnover and demonstrate that the impact of CEO research experience on corporate innovation is causal. Moreover, we show that the effect of researcher CEOs on innovation is stronger for firms with high analyst coverage or high long-term institutional ownership. Overall, our findings suggest that researcher CEOs are better innovators and help promote corporate innovation.

Keywords: Corporate innovation; CEO research experience; Innovative effectiveness; Analyst coverage; Institutional ownership

JEL Classification: G34, J24, O31, O32

Suggested Citation

Jiang, George and Li, Wenquan and Li, Yaohua and Wang, He, Are Researcher CEOs Better Innovators? (December 17, 2022). Available at SSRN: https://ssrn.com/abstract=4196027 or http://dx.doi.org/10.2139/ssrn.4196027

George Jiang

Washington State University ( email )

Department of Finance and Management Science
Carson College of Business
Pullman, WA 99-4746164
United States
509-3354474 (Phone)

HOME PAGE: http://directory.business.wsu.edu/bio.html?username=george.jiang

Wenquan Li

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Yaohua Li

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

He Wang (Contact Author)

Southern University of Science and Technology ( email )

1088 Xueyuan Avenue
Shenzhen, Guangdong 518055
China

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