In this article we analyse how board characteristics influence firm innovation. Firm innovation refers to basic innovation and entrepreneurial activities internal to a firm, such as the firm emphasis on new product development, innovation technology, and RandD investments. Drawing on agency theory, we developed hypotheses on specific board structural characteristics - i.e., board size, outsider ratio, directors’ shareholdings, and CEO duality - and firm innovation. We tested our model on a sample of 301 large manufacturing Italian companies. We find support for our argument that – contrary to predictions of agency theory on CEO ownership - directors’ shareholdings negatively influence firm propensity to innovate. Our results also suggest that board size may play a role in shaping firm propensity toward innovation.

Boards of Directors and Firm Innovation: an Empirical Analysis on Large Italian Companies / Zona, Fabio; A., Minichilli; A., Zattoni. - STAMPA. - (2009), pp. 495-504.

Boards of Directors and Firm Innovation: an Empirical Analysis on Large Italian Companies

Zona, Fabio;
2009-01-01

Abstract

In this article we analyse how board characteristics influence firm innovation. Firm innovation refers to basic innovation and entrepreneurial activities internal to a firm, such as the firm emphasis on new product development, innovation technology, and RandD investments. Drawing on agency theory, we developed hypotheses on specific board structural characteristics - i.e., board size, outsider ratio, directors’ shareholdings, and CEO duality - and firm innovation. We tested our model on a sample of 301 large manufacturing Italian companies. We find support for our argument that – contrary to predictions of agency theory on CEO ownership - directors’ shareholdings negatively influence firm propensity to innovate. Our results also suggest that board size may play a role in shaping firm propensity toward innovation.
2009
The Value Creating Board. Corporate Governance and Organizational Behaviour
London; New York
Routledge
9780415437424
Zona, Fabio; A., Minichilli; A., Zattoni
Boards of Directors and Firm Innovation: an Empirical Analysis on Large Italian Companies / Zona, Fabio; A., Minichilli; A., Zattoni. - STAMPA. - (2009), pp. 495-504.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/120259
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