Do new CEOs really care about innovation?

Abstract

This study asks whether new chief executive officers (CEOs) care about innovation postturnover. Using a large sample of Chinese listed firms between 2008 and 2019, our identification strategy relies on the exogenous variation in CEO turnovers. Our difference‐in‐difference estimates indicate that new CEOs improve R&D efficiency and generate more and higher quality patents. We further show that this positive effect is more pronounced when CEOs have longer career horizons and overseas experience. Overall, our findings indicate that CEO turnover represents an effective mechanism for fostering innovation and new CEOs indeed care about innovation. Our results could benefit several groups of stakeholders with respect to CEO selection process.

Can ESG activities stabilise IPO prices? Evidence from the Hong Kong stock market

“…Particularly, we unite symmetric and local‐to‐zero methods, wherein the former restricts $${\gamma \in [-2\delta ,+2\delta ]}^{3}$$ and the latter assumes $$\gamma \unicode{x0007E}N(0,{\delta }^{2}I$$). Following Ahmad et al (2023), we set $$\delta =0.005$$, presenting the results in Tables 10 and 11, which indicate that all coefficients lie between the lower and upper bounds and the relationship between ESG and IPO price stabilisation remains unchanged, respectively, specifying that our 2SLS results are valid in the plausibly exogenous tests.…”

“…Nevertheless, it remains debatable whether ESG activities’ average industrial number is valid for our estimation (Ahmad et al, 2023; Larcker & Rusticus, 2010). Therefore, we follow Conley et al (2012), using a plausibly exogenous test, further enhancing the credibility of our IV results.…”

“…Particularly, we unite symmetric and local-to-zero methods, wherein the former restricts ∈ γ δ δ [−2 , +2 ] 3 and the latter assumes γ N δ I ~(0, 2 ). Following Ahmad et al (2023), we set δ = 0.005, presenting the results in Tables 10 and 11, which indicate that all coefficients lie between the lower and upper bounds and the relationship between ESG and IPO price stabilisation remains unchanged, respectively, specifying that our 2SLS results are valid in the plausibly exogenous tests. 9 Finally, we perform PSM using all control variables (e.g., Firm Size, Leverage, SD_return) as the matching criteria.…”

“…Finally, the ESG activity measurement (text‐based analysis) contributes to the growing literature as a similar technique has been used to solve problems in other disciplines as well (Ahmad et al, 2023; Bushman et al, 2016; Fiordelisi & Ricci, 2014; Fiordelisi et al, 2019; Hoberg & Maksimovic, 2014; Jiang et al, 2019; Nguyen et al, 2019; Tetlock, 2007; Wang et al, 2021).…”

Informal institutions and corporate innovation: A Perspective from Red Culture

“…Firstly, our study contributes to the growing literature on the drivers of corporate innovation. Extending prior research, which has examined various firm-level factors such as CEO characteristics [ 24 ], agency conflicts [ 22 ], salary incentives [ 25 ], and corporate governance [ 6 ], our investigation delves into the influence of non-firm factors on innovation [ 14 , 26 , 27 ]. Specifically, we focus on the impact of Red Culture, an informal institutional element, on corporate innovation.…”