The chief financial officer (CFO) profile and R&D investment intensity: evidence from listed European companies

Abstract

PurposeThis study aims to investigate whether the characteristics of the chief financial officer (CFO) have an impact on the intensity of the corporate research and development (R&D) investment.Design/methodology/approachBased on hand-collected data for the CFOs of a sample of the largest European listed companies for the period 2013–2016, this study uses regression analyses to test empirically the association of CFO education, CFO gender and CFO age with R&D investment intensity.FindingsThe presence of female CFOs, CFOs with a Master of Business Administration (MBA) or Doctor of Philosophy (PhD) degree and older CFOs is positively associated with the intensity of R&D investment.Research limitations/implicationsThis study relies on some observable characteristics of CFOs and focuses on large listed companies.Practical implicationsThe results of this study may help investors, stakeholders and practitioners to understand better which type of CFO characteristics are more likely to result in higher firm-level R&D investment intensity.Originality/valueThis study offers the first insights into the impact of CFOs, as the most prominent C-suite executives, on the level of corporate investments in R&D activity.

Chief financial officer’s educational background from reputable universities and financial reporting quality

“…Datta and Iskandar-Datta (2014) found that "strategic" CFOs with an elite MBA (generalist) degree consistently command a compensation premium compared with non-MBA CFOs, even from an elite institution. Ginesti et al (2021) research also supports that CFOs with MBA degrees have a positive relationship with the intensity of R&D investment. This finding implies that CFOs with MBA degrees from reputable universities have advantage over those without an MBA.…”

The Impact of Audit Committee Characteristics on Real Earnings Management: The Moderating Role of Seniority Level and Education Level of Chief Financial Officer

“…The presumption is that CFO with high education will have broader insight to strengthen the company's performance, conduct supervision, and predict profits correctly. The research results by Ginesti et al [32] also found that CFO with a high educational background is more likely to give more resources for company activities such as company research and development. Moreover, according to Papadakis [33], leaders who have high education can strengthen the company's performance and affect decision-making.…”

Accountants in family firms—a systematic literature review

“…It appears that the primary interest of research lies in distinguishing between family and nonfamily accountants rather than being explicit about what roles accountants actually play in family firms. Here, the field might be missing the opportunity to move beyond the dichotomy adopted by family business research and instead rely on the research in the accounting domain acknowledging the different roles accountants might play in organizations vis-à-vis accounting and organizational outcomes (e.g., Ge et al, 2011;Ginesti et al, 2021). Nonetheless, implicitly, the reviewed literature alludes to a number of roles that the accountant plays in these family firms.…”