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The moderation effect of slack resources on the relationships between CEO characteristics and R%D expenditures

Author

Listed:
  • Ching-Wen Chen
  • Chin-Tsang Ho
  • Tsung-Che Tsai

Abstract

There are many references globally supporting the notion that innovation can raise the competitiveness of a firm, and that R%D expenditure is an appropriate measurement of innovation. The purpose of this paper is to investigate the relationship between a CEO's demographic characteristics and R%D expenditure. Considering the function of slack resources on incentive, risk buffer and strategy facilitation, this paper incorporates the slack resources variable into the relation between CEO characteristics and R%D expenditure. Slack resources have the ability to absorb losses caused by failures, which then increase the organisation's willingness to engage in risk-taking behaviour. The results reveal that CEOs with older age or higher education degree would consider if firm's resources are available or not when they invest R%D in technological industries. However, slack resources have no significant moderating effect on the relationships between CEOs with an engineering education background, shareholding and R%D expenditures.

Suggested Citation

  • Ching-Wen Chen & Chin-Tsang Ho & Tsung-Che Tsai, 2013. "The moderation effect of slack resources on the relationships between CEO characteristics and R%D expenditures," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 7(4), pages 357-374.
    • Handle: RePEc:ids:ijbsre:v:7:y:2013:i:4:p:357-374
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