Wang, L., Verousis, T. orcid.org/0000-0002-7812-1908 and Zhang, M. orcid.org/0000-0002-9699-1421 (2025) Market value of R&D, patents, and CEO characteristics. Financial Innovation, 11. 8.
Abstract
The contribution of knowledge capital to firm value has increased significantly, from 25% in the 1970s to 45% in the 2010s (Belo et al. in Decomposing firm value J Financ Econ 143:619–639, 2022). However, what influences firms’ ability to maximize the effect of knowledge capital on firm value? Drawing on insights from upper echelons, agency, and behavioral agency theories, we show that CEO characteristics are crucial in enabling firms to take advantage of knowledge stock. We empirically demonstrate that short-term CEO compensation structures are detrimental to a firm’s ability to take advantage of its knowledge stock. We further show that CEO power enhances knowledge stock and R&D intensity. Our study provides direct empirical evidence of the importance of CEO compensation structure and corporate governance in understanding firm value in a knowledge economy.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2025 The Authors. This is an Open Access article distributed under the terms of the Creative Commons Attribution Licence (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Innovation; Patent; Market value; CEO power; CEO compensation |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 16 Jan 2025 15:25 |
Last Modified: | 16 Jan 2025 15:25 |
Published Version: | https://doi.org/10.1186/s40854-024-00676-6 |
Status: | Published |
Publisher: | Springer Science and Business Media LLC |
Refereed: | Yes |
Identification Number: | 10.1186/s40854-024-00676-6 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:221382 |