CEO Overconfidence and firm’s R&D investment — Evidence from firm financialization

被引：0
|
作者：
Hao J. [1 ]
He F. [2 ,3 ]
Wang B. [4 ]
机构：
[1] School of Management and Engineering, Capital University of Economics and Business, Beijing
[2] School of Finance, Capital University of Economics and Business, Beijing
[3] Laboratory for Fintech and Risk Management, Tianjin
[4] Xuzhou Branch, Agricultural Development Bank of China, Xuzhou
来源：
Xitong Gongcheng Lilun yu Shijian/System Engineering Theory and Practice | 2023年 / 43卷 / 03期
基金：
中国国家自然科学基金;
关键词：
financialization; innovation; overconfidence; R&D investment;
D O I：
10.12011/SETP2021-2970
中图分类号：
学科分类号：
摘要：
Innovation plays an irreplaceable role in economic development and is the first driving force for enterprises development. Based on the non-financial listed firms in China from 2007 to 2019, this paper studies the impact of CEO overconfidence on company innovation, and analysis this effect through company financialization. We find that CEO overconfidence inhibits firm’s R&D investment. Company financialization intensifies the inhibitory effect of CEO overconfidence on enterprise R&D investment. By further distinguish the heterogeneity of enterprises, we find that this effect is stronger in small-scale firms, non-state-owned firms and low transparency firms. Our result is robust after recalculating the explained variables and explanatory variables, replacing the regression model method, dealing with the potential endogeneity and sample selection bias. The results show that overconfident CEO prefer to invest in financial assets with high risk and fast return, which has a crowding out effect on company R&D investment and inhibits enterprise innovation. The conclusions of this paper can be applied to the practice of company governance, deepen the understanding of the relationship between CEO characteristics and enterprise innovation choice, and help to realize the high quality and development of enterprises. © 2023 Systems Engineering Society of China. All rights reserved.
引用
收藏
页码：725 / 739
页数：14
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