The purpose of this paper is to evaluate the impact that PhD scientists serving on the board of directors of firms conducting hard science have on the R&D-based innovative performance of the firm.
The research hypotheses are built upon extant theory, and they are tested using two-stage least squared regression that control for the endogenous nature of board composition. Results are robust to alternative specifications.
This analysis shows that firms with higher numbers of PhD scientists on the board generate superior innovative output and more efficient monitoring; PhD board members with denser professional networks are more valuable as board members.
This paper provides practical advice to innovative firms on how to create a governance process that simultaneously improves monitoring and boosts the innovative performance.
This study is the first one to suggest that innovative firms can improve R&D monitoring and boost innovative output at the same time, and the first to investigate the role that PhD scientists can serve on the board of firms engaging in hard science.
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