DOI: 10.5176/2251-1970_BizStrategy13.30
Authors: Hsiang-Lan Chen
Abstract: This study examines a curvilinear relationship between CEO tenure and R&D investment and the moderating influence of independent directors on such relationship by utilizing a data set of electronics firms listed on the Taiwan Stock Exchange Corporations. This study finds an inverted-U relationship between CEO tenure and R&D intensity, supporting the view that CEOs experience life cycles.
The results also indicate a positive moderating effect of independent director ratio, supporting the view that independent directors influence managerial choices by monitoring and providing important resources. The findings provide one important managerial implication that firms competing on innovation through R&D investment may consider giving considerable weight to the nomination of more independent directors to the board.
Keywords: R&D investment, CEO tenure, independent directors
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