Title

Inventor Chief Executive Officers and Firm Innovation

Source of Publication

International Review of Finance

Abstract

© 2019 International Review of Finance Ltd. 2019 Using a novel, manually collected dataset, we find that firms whose chief executive officer (CEO) is an inventor experience significantly better innovation outcomes, as measured by patents and future citations. We obtain these results in models with firm fixed effects, in difference-in-difference analysis of transitioning CEOs that controls for the CEO fixed effects, and among firms with founder CEOs. Firms led by an inventor CEO also exhibit greater tolerance for failure as indicated by a greater number of both highly cited and uncited patents, and engage more in explorative search strategies that exploit new technological trajectories. Stock market, however, seems unable to fully capture the positive impact of inventor CEOs on future innovation: firms whose CEO transitions to be an inventor experience positive abnormal stock returns, especially during the early years following the transition.

Document Type

Article

First Page

247

Last Page

286

Publication Date

6-1-2019

DOI

10.1111/irfi.12266

Author First name, Last name, Institution

Ibrahim Bostan, Zayed University
G. Mujtaba Mian, Zayed University

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