Abstract
Purpose: This study examines whether the age and tenure of the chair of the board of directors are related to research and development (R&D) investment in China.
Design/Methodology: The study uses A-share manufacturing firms that traded on the Shanghai and Shenzhen stock exchange between 2009 and 2018. The study employs OLS regressions, controls for self-selection bias, and uses an instrumental variable to alleviate the concern of endogeneity.
Findings: The study finds that chair tenure has a negative relationship with R&D investment. We do not find a significant relationship between chair age and R&D investment.
Originality/value: The study contributes to corporate governance and strategic management literature by highlighting chair tenure as a new factor affecting R&D investments. It also adds a significant contribution to the limited literature on the chair’s role in strategic decisions. Moreover, companies that are eager to strengthen corporate governance and maintain sustained innovation may reconsider the chair tenure. Given that many proposals for board governance reform explicitly stress the importance of limiting board tenure, this study contributes to policy-makers by providing evidence in support of these proposals.
Design/Methodology: The study uses A-share manufacturing firms that traded on the Shanghai and Shenzhen stock exchange between 2009 and 2018. The study employs OLS regressions, controls for self-selection bias, and uses an instrumental variable to alleviate the concern of endogeneity.
Findings: The study finds that chair tenure has a negative relationship with R&D investment. We do not find a significant relationship between chair age and R&D investment.
Originality/value: The study contributes to corporate governance and strategic management literature by highlighting chair tenure as a new factor affecting R&D investments. It also adds a significant contribution to the limited literature on the chair’s role in strategic decisions. Moreover, companies that are eager to strengthen corporate governance and maintain sustained innovation may reconsider the chair tenure. Given that many proposals for board governance reform explicitly stress the importance of limiting board tenure, this study contributes to policy-makers by providing evidence in support of these proposals.
| Original language | English |
|---|---|
| Pages (from-to) | (In-Press) |
| Number of pages | 23 |
| Journal | Journal of Financial Reporting and Accounting |
| Volume | (In-Press) |
| Early online date | 29 Dec 2022 |
| DOIs | |
| Publication status | E-pub ahead of print - 29 Dec 2022 |
Bibliographical note
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Keywords
- Corporate governance
- board chair tenure
- board chair age
- China
- manufacturing sector
- R&D
