Title
Managerial incentives, CEO characteristics and corporate innovation in China's private sector
Document Type
Journal article
Source Publication
Journal of Comparative Economics
Publication Date
6-1-2011
Volume
39
Issue
2
First Page
176
Last Page
190
Publisher
Academic Press
Keywords
Corporate innovation, Managerial incentives, CEO characteristics
Abstract
We use a unique World Bank survey of 1,088 private manufacturing firms from 18 Chinese cities over the period 2000 to 2002 to empirically examine the roles of managerial incentives and CEO characteristics in a firm’s innovation activities. We look at both innovation effort (R&D intensity) and innovation performance measures such as new product sales. We obtain the following main results: (1) the presence of CEO incentive schemes increases both corporate innovation effort and innovation performance; (2) sales-based performance measures in the incentive scheme, as compared with profit-based performance measure, are more conducive to firm innovation; and (3) CEO education level, professional background and political connection are positively associated with firm’s innovation efforts. The main results are robust to endogeneity tests with instrumental variables. We also discuss some important policy implications.
DOI
10.1016/j.jce.2009.12.001
Print ISSN
01475967
E-ISSN
10957227
Publisher Statement
Copyright © 2010 Association for Comparative Economic Studies Published by Elsevier Inc.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Lin, C., Lin, P., Song, F. M., & Li, C. (2011). Managerial incentives, CEO characteristics and corporate innovation in China's private sector. Journal of Comparative Economics, 39(2), 176-190. doi: 10.1016/j.jce.2009.12.001
