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Is Firm Innovation Associated With Corporate Governance?

Author

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  • RAGHAVAN J. IYENGAR

    (School of Business, North Carolina Central University, 324 Willis Commerce Building, 1801 Fayetteville Street, Durham, North Carolina 27707, USA)

  • MALAVIKA SUNDARARAJAN

    (#x2020;Anisfield School of Business, Ramapo College of New Jersey, 505 Ramapo Valley Road, Mahwah NJ 07430, USA)

Abstract

U.S. Corporations spend millions of dollars on innovating new technologies. This despite the fact that such capital expenditure outlay runs the risk of possible failure and loss of investments. This paper investigates what factors drive a corporation to innovate. In addition to firm-specific factors, we examine board governance and industry concentration. This study examines the association of firm, governance and industry characteristics that may influence a firm to innovate. Results from logit regression seem to suggest that firm size, capital expenditure growth, and industry concentration are more likely to influence firm’s innovation efforts. Estimates also indicate that younger CEOs are more prone to innovation than older CEOs. These findings stand up to greater scrutiny when we perform a battery of robustness checks.

Suggested Citation

  • Raghavan J. Iyengar & Malavika Sundararajan, 2019. "Is Firm Innovation Associated With Corporate Governance?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-24, April.
    • Handle: RePEc:wsi:ijimxx:v:24:y:2019:i:03:n:s1363919620500279
    DOI: 10.1142/S1363919620500279
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