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Managerial myopia and corporate innovation strategy

Author

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  • Yu, Yang
  • Xie, Bingyuan
  • Dou, Zhuo
  • Fu, Qilong

Abstract

We investigate the consequences of managerial myopia on both the quantity of innovation input and the quality of innovation outputs in China. Managerial myopia not only leads to a reduction in R&D investment but also results in a deterioration in the outputs, captured by the decrease in those substantive innovations and the degradation of patents’ knowledge breadth. Encouragingly, effective corporate governance mechanisms tend to mitigate the adverse effects of managerial myopia on innovation, but external pressures from stock market and product market may prompt myopic management to hastily engage in R&D efforts, but with further deterioration in innovation quality.

Suggested Citation

  • Yu, Yang & Xie, Bingyuan & Dou, Zhuo & Fu, Qilong, 2024. "Managerial myopia and corporate innovation strategy," Finance Research Letters, Elsevier, vol. 67(PA).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324007633
    DOI: 10.1016/j.frl.2024.105733
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    References listed on IDEAS

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    1. Hong, Jifeng & Kazakis, Pantelis & Strieborny, Martin, 2024. "A fish rots from the head down: The contagion effect of upstream firms’ environmental misconduct on downstream firms’ green innovation continuity," MPRA Paper 122743, University Library of Munich, Germany.

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    More about this item

    Keywords

    Managerial myopia; Innovation quality; New quality productive forces; Corporate governance; Market pressure;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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