Financial munificence, R&D intensity, and new venture survival: critical roles of CEO attributes

Aric Xu Wang () and Kevin Zheng Zhou ()
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Aric Xu Wang: Sun Yat-sen University
Kevin Zheng Zhou: The University of Hong Kong

Small Business Economics, 2022, vol. 59, issue 4, No 15, 1659 pages

Abstract: Abstract Although financial resources are critical to new ventures, is having more of them always a good thing? Intrigued by industry observations and building on behavioral research into the limitations of munificent resources, we argue that financial munificence can have a negative moderating effect on the impact of R&D investment on venture survival. We further propose that three CEO attributes (i.e., work experience, education, and gender) can mitigate this negative moderating effect. Analyses of a six-year longitudinal dataset of 791 new technology ventures provide strong support for our hypotheses. We contribute to the behavioral research on how resource munificence matters for new ventures by examining the indirect downside of financial munificence and demonstrating how certain CEO attributes can mitigate this effect.

Keywords: Financial munificence; R&D intensity; New venture survival; Behavioral theory of the firm; CEO attributes (search for similar items in EconPapers)
JEL-codes: D21 L26 M13 O3 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11187-021-00592-4

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