Born to innovate? The birth‐order effect of CEOs on corporate innovation

Abstract

This study explores the effect of CEO birth order on corporate innovation. Using hand-collected data, we find that firms led by firstborn CEOs are less innovative. This finding survives a number of robustness checks. When firms are more risky, non-state-owned or less financially constrained, the association between birth order and innovation is stronger, suggesting that the negative impact of firstborn CEOs is larger when their innovative personality is more demanding or influential. Meanwhile, firstborn CEOs have larger impact on corporate innovation when they are born in cities where Confucian culture are more influential or grow up in a low-income family, consistent with our argument that sibling competition makes firstborns less innovative. Overall, our results suggest that firstborn CEOs have negative effect on corporate innovation because they are less innovative intrinsically.

Do Confucian values and working experience matter? The impact of provincial governors’ characteristics on the management level of major road accidents in China

“…One main challenge is to construct a valid measure to proxy governor's individual‐level Confucian values. Following prior studies (M. Chen et al., 2021; L. Chen, Jin, et al., 2019; Kung & Ma, 2014; Wan et al., 2021), we measure the Confucian values of governors by the number of Confucius temples at the city level where governors were born. We use this measurement for two main reasons.…”

“…The influences of Confucianism on the values of local people are subtle and unconscious (Y. J. Chen, Chen, et al., 2019). Furthermore, research claims that the more Confucius temples a place has, the local people embrace better the core values of Confucianism (Wan et al., 2021) and choose Confucianism as their ethical philosophy (Du, 2015).…”

The impact of Confucianism on auditor judgment

“…Confucianism is also negatively associated with companies' stock price crash risk (Bashir & Yu, 2019;Jebran et al, 2019), cash holdings (Chen, Ye, et al, 2020) and board gender diversity (Du, 2016). Wan et al (2021) find that the Confucian culture can strengthen the impact of firstborn CEOs on corporate innovation, while Li et al (2020) show that firms headquartered in regions with stronger Confucian atmospheres obtain more trade credit than their peers in other locations. These findings imply that Confucianism plays an important role in organizational practices.…”

“…Wan et al. (2021) find that the Confucian culture can strengthen the impact of firstborn CEOs on corporate innovation, while Li et al. (2020) show that firms headquartered in regions with stronger Confucian atmospheres obtain more trade credit than their peers in other locations.…”

CEO birth order and corporate social responsibility behaviors: The moderating effect of female sibling and age gap

“…Since CEO birth order shapes their behavior tendencies during childhood (Sulloway, 2009 ), and sibling rivalry is one of the key mechanisms behind birth order effects (Wan et al, 2021 ), it follows that the factors which influence sibling rivalry may inevitably influence birth order effects and individuals' behavioral preferences. Accordingly, we suppose that the negative effect of CEO birth order on corporate social responsibility behaviors would be strengthened when the sibling rivalry is greater.…”