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Managerial human capital and corporate R&D investment

Jing Xu and Haizheng Li

Journal of Economic Behavior & Organization, 2023, vol. 213, issue C, 151-171

Abstract: In this study, we employ firm-level panel data from China to study how the human capital characteristics of a firm's leadership affect R&D investment. One novel feature of this study is that we include human capital traits of both the CEO and the Board of Directors, as well as their interplay. Human capital is measured with various experiences to capture observed and unobserved traits. Using various econometric techniques, we find that both CEO's and BOD's human capital characteristics have a significant impact on R&D investment. CEOs’ innovation experience and overseas experiences promote innovation, while their production experience hinders it. The education and government experiences of board directors show different impacts on R&D investment. Moreover, the human capital traits of CEO and BOD influence each other and thus jointly affect innovation. The effects of leadership human capital on R&D investment are more profound in tech-intensive and smaller firms than in traditional or larger firms.

Keywords: Leadership human capital; Experience-based human capital measures; The interplay of CEO and BOD; R&D investment; Hausman-Taylor GMM estimation (search for similar items in EconPapers)
JEL-codes: D22 D80 L20 M12 O31 O32 O33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:213:y:2023:i:c:p:151-171

DOI: 10.1016/j.jebo.2023.07.021

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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