Academy fellow independent directors and innovation

Sihai Li (), Yi Quan (), Gary Gang Tian (), Kun Tracy Wang and Stella Huiying Wu ()
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Sihai Li: Zhongnan University of Economics and Law
Yi Quan: Zhongnan University of Economics and Law
Gary Gang Tian: Macquarie University
Stella Huiying Wu: Western Sydney University

Asia Pacific Journal of Management, 2022, vol. 39, issue 1, No 5, 103-148

Abstract: Abstract Drawing on human capital theory, this paper develops a contingency approach to explore how independent directors’ scarce human capital affects innovation investment intensity and innovation outputs in the Chinese context. Controlling for the presence of ordinary technical independent directors (TIDs) and a range of other factors, we find that academy fellow independent directors (AFIDs) have an incremental positive effect on innovation investment intensity and innovation outputs, and that this effect exists only for non–state-owned enterprises (non-SOEs), which are more constrained in their ability and resources to pursue value-enhancing innovation activities. Our channel analyses suggest that AFIDs play a strong resource provision role in enhancing innovation. However, their positive role in promoting impactful innovation activities diminishes when they face intensified government intervention and political risk. We clearly document that regulations that are designed to impose only intense external monitoring of independent directors may have unintended negative consequences on innovation, particularly when firms’ demands for resource provision are intense, as is the case with firm innovation.

Keywords: Innovation; Academy fellow independent directors; Human capital theory; Ownership; Government intervention (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10490-020-09749-3

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