Does economics and management education make managers more cautious? Evidence from R&D of Chinese listed firms

Guangqiang Liu, Ziqin Xie and Ming Li

Research in International Business and Finance, 2023, vol. 64, issue C

Abstract: This paper uses the innovation data of Chinese listed firms for 2015–2019 to investigate whether and how executives with economics and management educations influence firm innovation. We find that executives with economics and management educations are characterized by conservatism and risk avoidance and their firms undertake less innovative activity than other firms. This conclusion remains robust after excluding potential reverse causality. Further analysis finds that executives with an educational background in economics and management adopt a more conservative attitude toward risk when they have a low shareholding ratio or face high performance pressure. Moreover, a mechanism analysis shows that executives with an educational background economics and management are more radical and less conservative in their fields of expertise, i.e., are not blindly conservative. Finally, we determine that non-financial knowledge compensate for some of the inhibitory effects that economic and management educational backgrounds have on innovation.

Keywords: Economics and management educational background; Firm innovation; Risk avoidance; Financial decisions (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:riibaf:v:64:y:2023:i:c:s0275531922002331

DOI: 10.1016/j.ribaf.2022.101847

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