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Marketing CEOs and the pursuit of innovation: Evidence from the Chinese market

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  • Muchenje, Linda Tinofirei
  • Mbanyele, William

Abstract

This study investigates the effects of CEOs' marketing experience on corporate innovation. We observe an increase in firms' preference for CEOs with marketing experience in the Chinese labor market. For instance, the percentage of firms with a Marketing CEO in our study sample increased from 11 % in 2008 to 26 % in 2022. Our findings indicate that companies led by CEOs with marketing experience invest more in innovation, generate more patents and patent citations, and have higher innovation efficiency. Moreover, CEOs with marketing experience are associated with more significant breakthrough inventions in new areas unknown to the firm. We exploit exogenous CEO turnovers to address potential CEO-firm matching bias and find that the departure of Marketing CEOs leads to a deterioration in corporate innovation quantity and quality. Our findings hold up after a series of robustness checks. On average, CEOs with prior marketing experience encourage more innovation through increased customer interactions. Using supplier-customer relationships, we show that the impact of Marketing CEOs on innovation is more pronounced for firms with larger and more innovative customers and those in industries with low switching costs. Overall, our findings support the behavioral consistency proposition on the persistence and imprinting effects of professional experience on corporate policies.

Suggested Citation

  • Muchenje, Linda Tinofirei & Mbanyele, William, 2025. "Marketing CEOs and the pursuit of innovation: Evidence from the Chinese market," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:pacfin:v:94:y:2025:i:c:s0927538x25002690
    DOI: 10.1016/j.pacfin.2025.102932
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • 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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