Impact of Managers’ Traits and Compensation Structure on R&D Investments

Authors

  • Joungyeon Kim Indiana University Kokomo
  • Xiaoqiong Wang Indiana University Kokomo

DOI:

https://doi.org/10.33423/jabe.v20i9.221

Keywords:

Business, Economics, Finance, Investment

Abstract

This study examines the relationships between the characteristics of top management and a firm’s R&D expenditure level. We measure management entrenchment using executives’ tenures, ages, cash compensation, and dual roles as a chairman. The result suggests that firms with less entrenched management (i.e., younger, newer, and non-chairman executives with less cash compensation) invest more in R&D. Our result also shows that executives whose compensation has a higher sensitivity to stock volatility are associated with higher degree of R&D expenditures implying that executives’ compensation structures tend to influence R&D decisions.

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Published

2018-12-30

How to Cite

Kim, J., & Wang, X. (2018). Impact of Managers’ Traits and Compensation Structure on R&D Investments. Journal of Applied Business and Economics, 20(9). https://doi.org/10.33423/jabe.v20i9.221

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Section

Articles