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The moderation effect of slack resources on the relationships between CEO characteristics and R&D expenditures

The moderation effect of slack resources on the relationships between CEO characteristics and R&D... There are many references globally supporting the notion that innovation can raise the competitiveness of a firm, and that R&D expenditure is an appropriate measurement of innovation. The purpose of this paper is to investigate the relationship between a CEO’s demographic characteristics and R&D expenditure. Considering the function of slack resources on incentive, risk buffer and strategy facilitation, this paper incorporates the slack resources variable into the relation between CEO characteristics and R&D expenditure. Slack resources have the ability to absorb losses caused by failures, which then increase the organisation’s willingness to engage in risk-taking behaviour. The results reveal that CEOs with older age or higher education degree would consider if firm’s resources are available or not when they invest R&D in technological industries. However, slack resources have no significant moderating effect on the relationships between CEOs with an engineering education background, shareholding and R&D expenditures. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Business and Systems Research Inderscience Publishers

The moderation effect of slack resources on the relationships between CEO characteristics and R&D expenditures

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1751-200X
eISSN
1751-2018
DOI
10.1504/IJBSR.2013.056668
Publisher site
See Article on Publisher Site

Abstract

There are many references globally supporting the notion that innovation can raise the competitiveness of a firm, and that R&D expenditure is an appropriate measurement of innovation. The purpose of this paper is to investigate the relationship between a CEO’s demographic characteristics and R&D expenditure. Considering the function of slack resources on incentive, risk buffer and strategy facilitation, this paper incorporates the slack resources variable into the relation between CEO characteristics and R&D expenditure. Slack resources have the ability to absorb losses caused by failures, which then increase the organisation’s willingness to engage in risk-taking behaviour. The results reveal that CEOs with older age or higher education degree would consider if firm’s resources are available or not when they invest R&D in technological industries. However, slack resources have no significant moderating effect on the relationships between CEOs with an engineering education background, shareholding and R&D expenditures.

Journal

International Journal of Business and Systems ResearchInderscience Publishers

Published: Jan 1, 2013

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