Horizon problem and firm innovation: The influence of CEO career horizon, exploitation and exploration on breakthrough innovations

Sam Yul Cho and Sang Kyun Kim

Research Policy, 2017, vol. 46, issue 10, 1801-1809

Abstract: Building on labor market evaluations and legacy conservation motivation perspectives, we propose a mechanism to explain the relationship between CEO career horizons and breakthrough innovations. Using 10-year panel data from 681 U.S. firms, we find that firms that have a CEO with a short career horizon tend to produce fewer breakthrough innovations. We also find that the relationship between CEO career horizon and breakthrough innovation is partially mediated by R&D spending, and also moderated by organizational learning behavior (exploration vs. exploitation). This study highlights how a CEO’s motivation to protect success in the short term affects the firm’s innovativeness.

Keywords: CEO career horizon; Breakthrough innovation; Risk aversion; Legacy conservation; Labor market evaluation; Organizational learning behavior (search for similar items in EconPapers)
JEL-codes: D23 D81 M12 O31 O32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0048733317301427
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:46:y:2017:i:10:p:1801-1809

DOI: 10.1016/j.respol.2017.08.007

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().