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In the mood for creativity: Sunshine-induced mood, inventor performance, and firm value

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  • Chen, Yangyang
  • Hsu, Po-Hsuan
  • Podolski, Edward J.
  • Veeraraghavan, Madhu

Abstract

We investigate how firm value may be related to emotional and mental states of innovative workers via the innovation channel. By analyzing a comprehensive inventor-level dataset, we discover that the economic value inventors produce for their firms through their patenting activity is positively associated with their sunshine-induced mood. This augmentation in patent value is not due to a surge in the quantity of patents, but rather to the heightened significance and influence of the created inventions. These inventor-level observations aggregate to the firm level. The observed sunshine-enhanced effect is of a magnitude comparable to other primary behavioral drivers of innovation outcomes, such as CEO overconfidence and CEO thrill-seeking tendencies. Our research underscores the significance of the emotional and psychological states of innovative personnel that has implications for managers and shaerholders.

Suggested Citation

  • Chen, Yangyang & Hsu, Po-Hsuan & Podolski, Edward J. & Veeraraghavan, Madhu, 2024. "In the mood for creativity: Sunshine-induced mood, inventor performance, and firm value," Journal of Empirical Finance, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:empfin:v:78:y:2024:i:c:s0927539824000628
    DOI: 10.1016/j.jempfin.2024.101527
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    More about this item

    Keywords

    Mood; Inventor performance; Innovation; Creativity;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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