CEO ability, career concerns, firms’ lifecycle and investments in intellectual capital

Muhammad Nadeem, Rashid Zaman, Tahir Suleman and Nader Atawnah

International Review of Economics & Finance, 2021, vol. 75, issue C, 237-251

Abstract: We argue that the managerial ability of CEOs facing different career concerns can explain significant variation in firms’ investments in intellectual capital (IC), an important corporate strategic decision, and the driver of competitive advantage. Under the umbrella of Resource Based Theory, using a large sample of US firms, we find that CEOs’ managerial ability has a significant positive relation with investments in human, innovation and relational capital. This relationship is weaker when CEOs actually face lower career concerns. Furthermore, the relationship is less (more) pronounced in firms at the introduction (decline) stage of their lifecycle. Our results are robust to a range of sub-samples, alternative variable definitions and model specifications. The findings are important for firms embarking on building IC stocks, essential for firm’s survival in the knowledge-economy era.

Keywords: CEO ability; Intellectual capital; Career concerns; Resource-based view; Firm lifecycle (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:75:y:2021:i:c:p:237-251

DOI: 10.1016/j.iref.2021.04.023

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