發佈日期：2023-12-19 瀏覽數：364 2023-12-29 更新
Leon van Jaarsveldt, a project assistant professor at the Global MBA program of the College of Management, presented a paper as part of the SEED project on December 1, 2023. The paper, titled “CEO Regulatory Focus and Firm Innovation”, explores the relationship between CEO mindset and firm innovation and is co-authored by Professor Wen-Hsin Hsu.
The paper applies regulatory focus theory to analyze the shareholder letters of CEOs from S&P 1500 firms from 2019 to 2022. The theory suggests two distinct mindsets: promotion-focus, oriented toward achieving gains and aspirations, and prevention-focus, oriented toward avoiding losses and fulfilling obligations. The paper measures the level of these mindsets using textual analysis and correlates them with the innovation level of the firms, measured using patent counts and citations from the USPTO database.
The paper finds that firms with CEOs higher in prevention focus have more patents and patent citations. This suggests that prevention-focused CEOs may be more diligent in pursuing innovation. The paper also finds that CEO incentive compensation positively moderates the relationship between prevention focus and innovation, while it has no effect on the relationship between promotion focus and innovation.
The paper provides a perspective on the potential benefits of prevention-focused CEOs and has implications for board selection, CEO compensation, and innovation strategy.