Does Managerial Ability Facilitate Corporate Innovative Success?

Chen, Yangyang and Podolski, Edward J and Veeraraghavan, Madhu (2015) Does Managerial Ability Facilitate Corporate Innovative Success? Journal of Empirical Finance, 34. pp. 313-326.

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Abstract

This paper examines whether managerial ability facilitates corporate innovative success. First, we show that managerial ability is positively associated with innovative output. Second, we show that the positive association between managerial ability and innovative output is weaker for older CEOs and managers who stay in the same job for longer, suggesting a preference for a ‘quiet life’ by long serving CEOs. Third, we find that the equity market values patents generated by more able managers more positively, suggesting that equity holders deem better skilled managers more effective at converting innovative ideas into valuable new products. Finally, we show that managerial ability is positively associated with more ‘radical’ innovations, which are outside of the firm's knowledge base. Overall, our results suggest that managerial ability is an essential component of corporate innovative success.

Item Type:	Article
Uncontrolled Keywords:	Managerial Ability;Corporate Innovation;Patents;Citations
Subjects:	?? Finance ??
Divisions:	Finance and Strategy
Depositing User:	Mr. Ramesh Kamath
Date Deposited:	11 Sep 2018 17:33
Last Modified:	18 Feb 2019 11:25
URI:	http://tapmi.informaticsglobal.com/id/eprint/69

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