Do general managerial skills spur innovation?
File(s)
Accepted version
Author(s)
Perdigao Dias Custodio, C
Ferreira, M
Matos, P
Type
Journal Article
Abstract
We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime of work experience produce more patents. We address the potential endogenous CEO–firm matching bias using firm–CEO fixed effects and variation in the enforceability of noncompete agreements across states and over time during the CEO’s career. Our findings suggest that generalist CEOs spur innovation because they acquire knowledge beyond the firm’s current technological domain, and they have skills that can be applied elsewhere should innovation projects fail. We conclude that an efficient labor market for executives can promote innovation by providing a mechanism of tolerance for failure.
Date Issued
2019-02
Date Acceptance
2017-04-04
Citation
Management Science, 2019, 65 (2), pp.459-476
ISSN
1526-5501
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Start Page
459
End Page
476
Journal / Book Title
Management Science
Volume
65
Issue
2
Copyright Statement
© 2017 INFORMS
Subjects
Social Sciences
Science & Technology
Technology
Management
Operations Research & Management Science
Business & Economics
general human capital
innovation
patents
R&D
risk taking
RESEARCH-AND-DEVELOPMENT
CEO CHARACTERISTICS
EMPIRICAL-ANALYSIS
CORPORATE
MARKET
INCENTIVES
OVERCONFIDENCE
LOCATION
MERGERS
RISK
08 Information and Computing Sciences
15 Commerce, Management, Tourism and Services
Operations Research
Publication Status
Published
Date Publish Online
2017-09-25