Executives' financial background, corporate financialization and corporate innovation

Tongtong Sun, Ziliang Xie, Yunxing Song and Maopeng Lu

International Review of Financial Analysis, 2025, vol. 106, issue C

Abstract: This study systematically analyzes the inhibitory effect of CEO financial experience on corporate innovation decisions and its mechanisms using listed companies from 2012 to 2023. Results indicate that CEOs with financial backgrounds considerably reduce corporate innovation, confirming the short-term investment preference and risk aversion tendency associated with financial experience. The degree of corporate financialization plays a notable mediating role between financial background executives and innovation inhibition, as CEOs with financial backgrounds squeeze out research and development investment by increasing financial asset allocation. The inhibitory effect of executives' financial backgrounds is insignificant for Growth Enterprise Market enterprises and significant for main board enterprises.

Keywords: Executive financial background; Financialization; Corporate innovation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:106:y:2025:i:c:s1057521925006672

DOI: 10.1016/j.irfa.2025.104580

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