Management Capability and Innovation

Bill B. Francis, Iftekhar Hasan and Gokhan Yilmaz

A chapter in Empirical Research in Banking and Corporate Finance, 2022, vol. 21, pp 29-74 from Emerald Group Publishing Limited

Abstract: 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.

Keywords: Managerial ability; innovation; innovative efficiency; R&D; patents; core competence; G34; O31; O32; O34 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afeczz:s1569-373220220000021002

DOI: 10.1108/S1569-373220220000021002

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