【12月13日】Directors’ Reelection Pressure and Advisory Roles in Innovative Project Choices发布日期：2019-09-12 21:13:37
Directors’ Reelection Pressure and Advisory Roles in Innovative Project Choices
Abstract In this paper, we examine how reelection pressure on directors affects firms’ choices with respect to innovation projects and subsequent innovation performance. We use the staggered adoption of legislation that empowers shareholders to change voting standards in director elections across different U.S. states as exogenous increases to directors’ reelection pressure. We find that firms have weaker patenting performance and conduct less exploratory innovation after legislative changes. We find that the effect of reelection pressure on innovation is stronger when NEDs either have higher labor market risk or when their advisory roles are needed more. Moreover, the turnover-performance sensitivity of NEDs significantly increases after legislative changes. We also find suggestive evidence that directors’ advisory roles shape corporate innovation activities, as firms file more patents in and make more citations to fields that are related to NEDs’ prior working experience when they join firms, and this effect becomes weaker after legislative changes
About Dr. Wu
Dr. Wu’s research focuses on corporate finance. He graduated from University of Pittsburgh with a PhD degree in Economics, and from Shanghai Jiao Tong University with a Bachelor’s degree in International Economics. He has published in renowned journals such as Journal of Banking and Finance, Game and Economic Behavior and Journal of Corporate Finance. His work has been presented in leading conferences such as the EFA, CICF and is scheduled to be presented in the AFA. He serves as referee for International Review of Economics and Finance and Journal of International Accounting Research.