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Fear to lose? An analysis of CEO successors’ decision-making regarding R&D intensity based on behavioral agency theory

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  • Xin Liu

    (Hebei University of Technology)

Abstract

This study builds on insights from behavioral agency theory and upper echelon perspectives to examine the impact of CEO succession on firms’ post-succession R&D intensity. Drawing on behavioral agency theory, we analyze the CEO successor’s decision on R&D intensity after taking office when faced with risks and payoffs brought by R&D investments. The moderating effects of performance on succession and CEO successors’ age on the relationship between CEO succession and R&D intensity are also examined. By empirically analyzing a sample of Chinese listed companies during 2010–2016, we find that CEO successors tend to decline firm R&D intensity after taking office. Moreover, higher firm performance upon succession enhances CEO successors’ motivation to decline the R&D intensity post-succession; with the increase in CEO age, CEO successors’ motivation to decline firm R&D intensity weakens.

Suggested Citation

  • Xin Liu, 2023. "Fear to lose? An analysis of CEO successors’ decision-making regarding R&D intensity based on behavioral agency theory," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 403-430, February.
    • Handle: RePEc:pal:abaman:v:22:y:2023:i:1:d:10.1057_s41291-021-00172-0
    DOI: 10.1057/s41291-021-00172-0
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