The costs and benefits associated with inventor CEOs

Byun, SeongK.; Fuller, Kathleen P.; Lin, Zhilu

doi:10.1016/j.jcorpfin.2021.102094

Cited by 11 publications

(3 citation statements)

References 58 publications

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“…A powerful governance structure motivates the CEO of the firm to bring quality work to the company (Anjam, 2011). In strong corporate governance structure, if the CEO is capable enough then his pay package is designed in such a way that is more than his expectations so that CEO put much effort to produce quality work and tries to achieve the desired results (Byun et al, 2021). However, the personality characteristics of 8 the CEO are more important to decide whether instead of high compensation, the CEO tries to increase the firm value or focus on fulfillment of his own desires only (Shah, 2009).…”

Section: Impact Of Compensation Of Ceo On Earnings Managementmentioning

confidence: 99%

Corporate governance Role between CEO compensation and earnings management: A developing economy Perspective Evidence from Pakistan

Marium,

Mustafa

2023

NIJBM

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The purpose of this research is to examine the relationship of compensation of CEO and management of earnings of firm and further investigated the corporate governance role as a moderator in this relationship in developing country, Pakistan. In this research, a sample of 100 Pakistani listed firms is used from 2012 to 2022. In e-views software, the technique of panel data is performed as the data is both time series and cross sectional, and the results of fixed effect model are used for analysis. The study finds that the impact of compensation of CEO on earnings management is positive and the relationship is moderated by governance structure of the firm. The association between compensation of CEO and management of earnings is positive and it is strengthened in weak governance system of company but this relationship weakens in strong governance system of firm. The sample of the study comprises of only CEO’s of firm. Other top management can be used to conduct this research. This study allows a clear understanding of how top management responds and reacts if corporate governance structure of the firm is weak or strong. Strong corporate governance structure can help the firm to control the manipulative behavior. The structure of CEO compensation may be designed in such a way that the interests of shareholders and managers are aligned and information asymmetry is reduced. This research adds significantly to the current literature by considering governance structure of company as a moderator between compensation of CEO and management of earnings in the perspective of Pakistan.

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Section: Impact Of Compensation Of Ceo On Earnings Managementmentioning

confidence: 99%

Corporate governance Role between CEO compensation and earnings management: A developing economy Perspective Evidence from Pakistan

Marium,

Mustafa

2023

NIJBM

View full text Add to dashboard Cite

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“…The technical background of founders helps firms speed up the innovation process by providing valuable tacit knowledge (He and Hirshleifer, 2019). A founder inventor has a high level of intrinsic motivation to advance the invention; thus, he or she is more prepared to engage in R&D and take risks (Byun et al, 2021). We argue that the presence of a founder inventor helps to speed the development and commercialisation of novel inventions, thus, addressing public investor concerns and weakening the negative effect of novel technological inventions on the IPO speed of start-ups.…”

Section: The Moderating Role Of Founder Inventormentioning

confidence: 99%

“…In addition, founder inventors generally have a clear vision about the invention's potential applications making them better placed to manage and commercialise them than non-inventor founders. This is supported by the fact that inventor CEOs often generate more trademarks than non-inventor CEOs (Byun et al, 2021). As a result, the presence of founder inventors reduces the technological and commercial risks associated with the novel invention thus, weakening a public investor's negative attitude towards the technological novelty of the invention.…”

Section: The Moderating Role Of Founder Inventormentioning

confidence: 99%

The technological novelty of invention and speed to IPO of high-tech start-ups

2022

International Small Business Journal: Researching Entrepreneurs

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The technological novelty of inventions signals economic potential while simultaneously indicating considerable technological and market risks. We speculate that unlike early-stage venture capital (VC) investors, late-stage public investors will interpret technological novelty as a signal of high risks. Consequently, they will hesitate to promptly invest in high-tech start-ups with such inventions, thereby slowing the initial public offering speed of the start-ups. Based on a sample of 408 VC-backed healthcare start-ups founded between 1990 and 2010, we find support for our hypothesis. We also find that the negative effect of technological novelty of inventions can be relieved when the technology is characterised by conventionality, when the founder is also the inventor, or when the start-up is backed by premium VC investors.

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Inventor CEO involvement and firm exploitative and exploratory innovation

Harrison,

Boivie,

Stern

et al. 2024

Strategic Management Journal

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Research SummaryThis study extends recent findings that inventor CEOs increase innovative output in large established firms by examining how their involvement in the innovative process influences the nature of innovations produced. Our theory suggests that inventor CEOs who take a hands‐on approach to innovation lead their firms to engage in more exploitative rather than exploratory innovation. We further posit that this effect is particularly strong for insider inventor CEOs, and especially founders, but weaker for outsiders and when the firm's board has broader industry experience. Using a sample of S&P 1500 firms from 1994 to 2010 and inventor CEOs' engagement in patenting as an indicator of hands‐on involvement, we find considerable support for our predictions.Managerial SummaryCEOs with hands‐on experience innovating can substantially increase innovative output in large established firms. Yet, we show that inventors who remain directly engaged in their firms' innovation activities as CEO can limit their scope to incremental innovations that exploit existing technologies as opposed to more radical innovations that result in novel product or service offerings. These tendencies are stronger for inventors who come to the CEO position from inside the firm, especially founders, but weaker when the firm's board has broader industry experience. Overall, our study reveals an important tradeoff for large firms of having an inventor as CEO, how hands‐on involvement by inventor CEOs may narrow their firms' innovative trajectories, and how or when these tendencies can be mitigated.

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The costs and benefits associated with inventor CEOs

Cited by 11 publications

References 58 publications

Corporate governance Role between CEO compensation and earnings management: A developing economy Perspective Evidence from Pakistan

Corporate governance Role between CEO compensation and earnings management: A developing economy Perspective Evidence from Pakistan

The technological novelty of invention and speed to IPO of high-tech start-ups

Inventor CEO involvement and firm exploitative and exploratory innovation

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