Management Capability and Innovation
Empirical Research in Banking and Corporate Finance
ISBN: 978-1-78973-398-3, eISBN: 978-1-78973-397-6
Publication date: 12 September 2022
This chapter investigates whether core competence of managers and their expansive (vs. specialized) managerial style affects firms' innovative ability, capacity, and efficiency. Using exogenous CEO departures as a natural experiment, it establishes a causal link between managerial capability and innovation. Importantly, it reveals that firms with talented managers receive significantly more nonself citations; make significantly lower self-citations and lesser citations to the others, indicating novel and explorative innovation achievements. Also, managers with higher general (specialized) ability are cited more (less) by patents from a wider range of fields. Lastly, career concern is identified as a mechanism linking higher ability and innovation.
Francis, B.B., Hasan, I. and Yilmaz, G. (2022), "Management Capability and Innovation", Ferris, S.P., John, K. and Makhija, A.K. (Ed.) Empirical Research in Banking and Corporate Finance (Advances in Financial Economics, Vol. 21), Emerald Publishing Limited, Bingley, pp. 29-74. https://doi.org/10.1108/S1569-373220220000021002
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