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Inventor CEOs

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  • Islam, Emdad
  • Zein, Jason

Abstract

One in five U.S. high-technology firms are led by CEOs with hands-on innovation experience as inventors. Firms led by “Inventor CEOs” are associated with higher quality innovation, especially when the CEO is a high-impact inventor. During an Inventor CEO's tenure, firms file a greater number of patents and more valuable patents in technology classes where the CEO's hands-on experience lies. Utilizing plausibly exogenous CEO turnovers to address the matching of CEOs to firms suggests these effects are causal. The results can be explained by an Inventor CEO's superior ability to evaluate, select, and execute innovative investment projects related to their own hands-on experience.

Suggested Citation

  • Islam, Emdad & Zein, Jason, 2020. "Inventor CEOs," Journal of Financial Economics, Elsevier, vol. 135(2), pages 505-527.
    • Handle: RePEc:eee:jfinec:v:135:y:2020:i:2:p:505-527
    DOI: 10.1016/j.jfineco.2019.06.009
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    More about this item

    Keywords

    Inventor CEOs; CEO style; Innovation; Human capital;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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