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CEO financial career and corporate innovation: Evidence from China

Author

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  • Yang, Chenlin
  • Xia, Xinping
  • Li, Yuguo
  • Zhao, Yufang
  • Liu, Shuang

Abstract

We examine the relationship between chief executive officers (CEOs) and firm innovation. Using CEO individual-level and firm-level data across the Chinese A-share market from 2008 to 2015, a Poisson model estimation shows that financial expert CEOs have significant negative impacts on firm innovation. Financial expert CEOs have caused a 17.5% decrease in the firm innovation level. We argue that the negative effect is due to the crowding-out effect of additional financial investments, which is facilitated by the CEOs’ behavioral consistency. Our study sheds light on exploring CEOs’ behavioral idiosyncrasy on firms’ nonfinancial performance.

Suggested Citation

  • Yang, Chenlin & Xia, Xinping & Li, Yuguo & Zhao, Yufang & Liu, Shuang, 2021. "CEO financial career and corporate innovation: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 81-102.
    • Handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:81-102
    DOI: 10.1016/j.iref.2021.01.018
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    References listed on IDEAS

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    4. Li, Ganglei & Shao, Yunfei, 2023. "How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization," Technology in Society, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    Financial expert CEO; Innovation; Behavioural consistency;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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