Corporate Governance and Innovation

Sharma, Jai Prakash; Jhunjhunwala, Shital; Sharda, Shweta

doi:10.1007/978-981-10-8926-8_5

Cited by 5 publications

(16 citation statements)

References 52 publications

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“…Similar positive effects are also found for the Chinese context in several studies such as Dong and Gou (2010), Fu (2019), Shapiro et al (2015), Wang (2021) and Zhang (2022). Along the same line, Ashwin et al (2016), Sharma et al (2018) and Suman and Singh (2020) find that greater board independence improves innovation for Indian firms. These results are repeated in studies for other countries such as Japan (Takahiro, 2015), United Arab Emirates (Iren and Tee, 2018), and Russia (Berezinets et al, 2019).…”

Section: Independent Directors and Firm Innovationsupporting

confidence: 77%

“…Along the same line, Ashwin et al. (2016), Sharma et al. (2018) and Suman and Singh (2020) find that greater board independence improves innovation for Indian firms.…”

Section: Research Background and Hypothesesmentioning

confidence: 81%

“…The board of directors plays a key corporate governance role in strategic decisions, with the independent directors also being in charge of protecting minority interests (Fern andez-Temprano and Tejerina-Gaite, 2020) and they may also be a guarantee of firm decisions like firm innovation that may be perceived as highly risk by managers and large shareholders (Hern andez et al, 2010). Most previous studies on the relationship between independent directors and firm innovation have been carried out in countries with an Anglo-Saxon financial system, such as Australia (Valencia, 2018), US (Balsmeier et al, 2017;Belkacemi et al, 2021;Iyengar and Sundararajan, 2020;Jiraporn et al, 2017;Li and Rainville, 2021;Lu and Wang, 2018;Tai et al, 2018), UK (Garcia Osma, 2008;Rodrigues et al, 2020;Sena et al, 2018), and Asia (Ashwin et al, 2016;Berezinets et al, 2019;Chen et al, 2016;Chen and Hsu, 2009;Dong and Gou, 2010;Fu, 2019;Iren and Tee, 2018;Liao et al, 2019;Shapiro et al, 2015;Sharma et al, 2018;Suman and Singh, 2020;Takahiro, 2015;Wang, 2021;Zhang, 2022). The empirical evidence for Europe is more limited (Attia et al, 2021;Rossi and Cebula, 2015;Wincent et al, 2012) and, as far as Spain is concerned, to our knowledge, there are only two studies: Gonzales-Bustos and Hern andez-Lara (2014) and Gonzales-Bustos et al (2020) [3].…”

Section: Introductionmentioning

confidence: 99%

“…, 2019; Shapiro et al. , 2015; Sharma et al. , 2018; Suman and Singh, 2020; Takahiro, 2015; Wang, 2021; Zhang, 2022).…”

Section: Introductionmentioning

confidence: 99%

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Independent directors and firm innovation: the moderating role of gender and nationality diversity

Sierra-Morán

García²,

González-Álvarez³

2022

EJIM

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PurposeAlthough the literature on corporate governance and firm innovation finds that board independence is important, this paper proposes that the presence of independent directors alone is not enough to explain their impact on firm innovation. This study analyses if diversity among independent directors may affect the relationship between board independence and firm innovation.Design/methodology/approachA panel data on a sample of 124 Spanish listed companies for the period 2008–2019 used to test the hypotheses.FindingsResults suggest that independent directors have a negative effect on firm innovation, measured as number of patents, but when there are high levels of gender and nationality diversity among such directors, this negative effect may be mitigated.Originality/valueConsidering that firm innovation is a complex process associated with decision-making and that board independence itself may be not enough, this study goes a step further and delves deeper into the characteristics of independent directors. As far as is known, this paper is the first theoretical and empirical study that considers that independent director diversity as a moderating variable between board independence and firm innovation. Besides, this research contributes to the debate on the role of independent directors in firm innovation and the results may also serve as a guideline for policy makers and firms for structuring boards that are pro-innovation.

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Section: Independent Directors and Firm Innovationsupporting

confidence: 77%

“…Along the same line, Ashwin et al. (2016), Sharma et al. (2018) and Suman and Singh (2020) find that greater board independence improves innovation for Indian firms.…”

Section: Research Background and Hypothesesmentioning

confidence: 81%

Section: Introductionmentioning

confidence: 99%

“…, 2019; Shapiro et al. , 2015; Sharma et al. , 2018; Suman and Singh, 2020; Takahiro, 2015; Wang, 2021; Zhang, 2022).…”

Section: Introductionmentioning

confidence: 99%

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Independent directors and firm innovation: the moderating role of gender and nationality diversity

Sierra-Morán

García²,

González-Álvarez³

2022

EJIM

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“…Also, due to the communication and coordination problems that a large board size may create and the resulting lack of cohesion and divided criteria, directors are also likely to be more susceptible to CEO manipulation (Cheng, 2008). Several empirical studies support these negative arguments (Blibech & Berraies, 2018;Chen, 2012;Lin & Chang, 2012;Sharma et al, 2018). However, other empirical evidence suggests that board size does not have a significant effect on innovation (Bianchi et al, 2012; Chouaibi & Jarboui, 2012;Shapiro et al, 2015;Valencia, 2018) and that it is difficult to establish an optimal board size because this depends on each organization's needs and size.…”

Section: Board Structural Diversity and Firm Innovationmentioning

confidence: 99%

The board of directors and firm innovation: A meta-analytical review

Sierra-Morán

García

González-Álvarez

et al. 2021

BRQ Business Research Quarterly

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The literature on corporate governance has highlighted the importance of board characteristics related to firm innovation. However, empirical findings have not been totally conclusive, and some seem contradictory. Adopting a new perspective, we have tried to help resolve the puzzle using a meta-analysis that integrates findings from 96 previous studies to analyze the relationship between board attributes, grouped by their relation to structural or demographic diversity, and firm innovation for the period 1988–2018. The results suggest that certain aspects of boards, such as meeting frequency and the proportions of independent directors and outsiders, show the most significant correlations with firm innovation, but the levels of association vary depending on whether innovation is measured as inputs or outputs and depending on the sample considered and the methodology employed. Finally, general guidelines are suggested regarding practical implications and future research. JEL CLASSIFICATION: O32, G34

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Innovation governance in practice: A business policy approach

Água

Correia

2020

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Innovation is a key driver for any organization’s competitiveness and sustainability. Even in the public sector, a lack of innovation may affect organizations in many different ways, ranging from lost opportunities for more efficient and innovative processes to staff morale decrease; staff that embeds organizational knowledge, values and culture. Innovation can provide new ways of doing things; strengthening competitive advantages or providing more competitive products and services. Innovative organizations also make jobs more fulfilling, and ultimately making the world a better place. Board directors need to be more than just observers. According to Chouaibi, Boujelbene, and Affes (2009), board directors do have a main role in what driving innovation concerns, and that there is a need for an adequate framework in order to promote such involvement from the board of directors. Moreover, Saravia and Saravia-Matus (2017) suggest the problem of the determination of causality has become an increasingly important question in the field of corporate governance. By following a logical thinking process, we ended at a pragmatic and deployable model backed by logical cause and effect. Taking a business policy approach, we argue that it is possible to attain more innovative organizations and innovation governance should be on every board’s priority list.

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Corporate Governance and Innovation

Cited by 5 publications

References 52 publications

Independent directors and firm innovation: the moderating role of gender and nationality diversity

Independent directors and firm innovation: the moderating role of gender and nationality diversity

The board of directors and firm innovation: A meta-analytical review

Innovation governance in practice: A business policy approach

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