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 / F., Zona; A., Minichilli; Zattoni, Alessandro. - (2009), pp. 495-504.

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

ZATTONI, ALESSANDRO
2009

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.
9780415437424
Boards of Directors and Firm Innovation: an Empirical Analysis on Large Italian Companies / F., Zona; A., Minichilli; Zattoni, Alessandro. - (2009), pp. 495-504.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/147663
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