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Does managerial ability facilitate corporate innovative success?
journal contribution
posted on 2015-12-01, 00:00 authored by Y Chen, Edward Podolski, M VeeraraghavanThis paper examines whether managerial ability facilitates corporate innovative success. First, we show that managerial ability is positively associated with innovative output. Second, we show that the positive association between managerial ability and innovative output is weaker for older CEOs and managers who stay in the same job for longer, suggesting a preference for a 'quiet life' by long serving CEOs. Third, we find that the equity market values patents generated by more able managers more positively, suggesting that equity holders deem better skilled managers more effective at converting innovative ideas into valuable new products. Finally, we show that managerial ability is positively associated with more 'radical' innovations, which are outside of the firm's knowledge base. Overall, our results suggest that managerial ability is an essential component of corporate innovative success.
History
Journal
Journal of empirical financeVolume
34Pagination
313 - 326Publisher
ElsevierLocation
Amsterdam, The NetherlandsPublisher DOI
ISSN
0927-5398Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2015, ElsevierUsage metrics
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