Supporter or Supervisor? The Role of Chief Financial Officers in Corporate Innovation

Junqin Huang, Youliang Liao (), Bin Lin and Lawrence Loh
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Junqin Huang: School of Business, Sun Yat-sen University, Guangzhou 510275, China
Youliang Liao: Foshan State-Owned Assets Supervision and Administration Commission, Foshan 528000, China
Bin Lin: School of Business, Sun Yat-sen University, Guangzhou 510275, China
Lawrence Loh: Centre for Governance and Sustainability, NUS Business School, National University of Singapore, Singapore 117592, Singapore

Sustainability, 2022, vol. 14, issue 15, 1-18

Abstract: Like the chief executive officer (CEO), the chief financial officer (CFO) is an important corporate player. However, compared to the role of CEOs, research on the factors influencing corporate innovation has paid very little attention to the role of CFOs. Based on the perspective of role theory, we measure CFO role performance by organizational identification to explore the role of CFOs in corporate innovation. Employing the availability of CFO organizational identification data from a survey of listed firms in China, we find that: (1) CFO organizational identification is negatively associated with innovation output in state-owned enterprises (SOEs) and positively associated with innovation output in non-state-owned enterprises (non-SOEs); (2) corporate misconduct experience positively moderates the relationship between CFO organizational identification and innovation in SOEs; (3) CFO financial industry experience positively moderates the relationship between CFO organizational identification and innovation in non-SOEs. Our results show that CFOs play the supervisor role in innovation in SOEs and the supporter role in innovation in non-SOEs. Our research provides theoretical and practical references for companies to sustainably drive innovation.

Keywords: CFO; organizational identification; corporate innovation; role expectation; role theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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