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CEO political preference and corporate innovation

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  • Han, Syungjin

Abstract

I demonstrate that CEOs’ personal political preferences influence corporate innovation. Firms managed by Republican CEOs tend to adopt more flexible employment policies exhibiting higher employment elasticity with respect to sales. They also tend to have a lower level of corporate innovation, as measured by the number of patents and subsequent citations. The results suggest that firms with Republican CEOs who provide less job security have a negative impact on employees’ innovation incentives.

Suggested Citation

  • Han, Syungjin, 2019. "CEO political preference and corporate innovation," Finance Research Letters, Elsevier, vol. 28(C), pages 370-375.
    • Handle: RePEc:eee:finlet:v:28:y:2019:i:c:p:370-375
    DOI: 10.1016/j.frl.2018.06.006
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    Cited by:

    1. Amin, Md Ruhul & Wang, Xinyu & Aktas, Elvan, 2023. "Does oil price uncertainty affect corporate innovation?," Energy Economics, Elsevier, vol. 118(C).
    2. Hoepner, Andreas G.F. & Lin, Ming-Tsung, 2022. "Do shareholder views affect corporate political activities?," International Review of Financial Analysis, Elsevier, vol. 84(C).
    3. Chen, Wanyi & Jin, Rong, 2023. "Does tax uncertainty affect firm innovation speed?," Technovation, Elsevier, vol. 125(C).
    4. El Ghoul, Sadok & Fu, Zhengwei & Guedhami, Omrane & Saadi, Samir, 2023. "Firm inflexibility and the implied cost of equity," Finance Research Letters, Elsevier, vol. 52(C).
    5. Chenguang Li & Zhenjun Qiu & Tao Fu, 2021. "The Role of Policy Perceptions and Entrepreneurs’ Preferences in Firms’ Response to Industry 4.0: The Case of Chinese Firms," Sustainability, MDPI, vol. 13(20), pages 1-19, October.
    6. Sun, Lan & Liu, Shaobo & Chen, Peng, 2022. "Does the paternalism of founder-managers improve firm innovation? Evidence from Chinese non-state-owned listed firms," Finance Research Letters, Elsevier, vol. 49(C).
    7. Plaksina, Yulia & Gallagher, Liam & Dowling, Michael, 2019. "CEO social status and M&A decision making," International Review of Financial Analysis, Elsevier, vol. 64(C), pages 282-300.
    8. Hedy Jiaying Huang & Ahsan Habib & Sophia Li Sun & Ying Liu & Huiting Guo, 2021. "Financial reporting and corporate innovation: a review of the international literature," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5439-5499, December.
    9. Qi, Wenhao & Li, Biao & Liu, Qiqi & Lv, Jiaqi, 2023. "Low-skill lock-in? Financial resource mismatch and low-skilled labor demand," Finance Research Letters, Elsevier, vol. 55(PB).

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    More about this item

    Keywords

    CEO; Innovation; Political preference; Employment policy;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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