The study focuses on the essential role of managerial characteristics, particularly the age of chief executive officers (CEOs), in influencing firm investment in research and development (R&D). Despite the significant impact that CEO age can have on organizational outcomes, there has been a notable dearth of research investigating this specific aspect in relation to R&D investment within companies over the past 15 years. As such, this study seeks to address this gap in research by examining the impact of elderly CEO, Chair-CEO age similarity and Chair-CEO elderly-age similarity on R&D investment intensity in Chinese publicly listed companies between 2015 and 2020. By analyzing 1,632 firm-year observations using panel corrected standard errors (PCSE) and Hausman–Taylor estimations, the results indicated that both age similarity between Chair-CEOs and having elderly Chair-CEOs positively contribute to higher levels of R&D investment. The implication for practice is that organizations prioritizing long-term R&D efforts are suggested to have Chairs and CEOs who share a similar age and are at an elderly age level, thus promoting better cooperation, understanding and alignment of strategic goals. This age similarity enhances communication, personal connections and mutual trust, leading to increased information exchange, reduced risk aversion and stronger support for R&D initiatives.
Abdel-KhalikR. A. (2014). CEO risk preference and investing in R&D. Abacus, 50(3), 245–278. https://doi.org/10.1111/abac.12029
2.
AgnihotriA., & BhattacharyaS. (2024). CEO competitive aggressiveness and relative R&D investment. Technology Analysis & Strategic Management, 36(1), 137–151. https://doi.org/10.1080/09537325.2022.2026318
3.
AhapovaV. (2020). Media and economic growth: Country groups difference via panel data. European Journal of Business and Management Research, 5(5). https://doi.org/10.24018/ejbmr.2020.5.5.510
4.
AkpanE. O., & AmranN. A. (2014). Board characteristics and company performance: Evidence from Nigeria. Journal of Finance and Accounting, 2(3), 81. https://doi.org/10.11648/j.jfa.20140203.17
5.
Al-DubaiS. A. A. (2023). Do level, field, and place of board members’ education impact financial risk disclosure? A Saudi empirical evidence. Heliyon, 9(12), e22288. https://doi.org/10.1016/j.heliyon.2023.e22288
6.
Al-DubaiS. A. A., & AlotaibiK. O. (2023). Examining the relationship between board characteristics and financial risk disclosure: A longitudinal analysis based on agency theory. Corporate Governance and Organizational Behavior Review, 7(4), 137–151. https://doi.org/10.22495/cgobrv7i4p12
7.
Al-DubaiS. A. A., & Bu HayaM. I. (2023). To what extent does the audit committee experience affect financial risk disclosure? Non-linear evidence from Saudi Arabia. Journal of Southwest Jiaotong University, 58(6), 508–527.
8.
AroraP., & GaurA. (2022). Peer directors’ effort, firm efficiency and performance of diversified firms: An efficacy-based view of governance. Journal of Business Research, 151, 593–608. https://doi.org/10.1016/j.jbusres.2022.07.035
9.
AzzamA. (2022). Board gender diversity and innovation activities: Evidence from R&D investments in the UK. Cogent Business & Management, 9(1), 2154056. https://doi.org/10.1080/23311975.2022.2154056
10.
AzzamA., & AlhababsahS. (2022). Do tenure and age of board chair matter for R&D investment?Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-01-2022-0023
11.
AzzamA., & AlhababsahS. (2023). Does age similarity between board chair and CEO matter for R&D investments? Evidence from China. Finance Research Letters, 58, 104522. https://doi.org/10.1016/j.frl.2023.104522
12.
BarkerV. L., & MuellerG. C. (2002). CEO characteristics and firm R&D spending. Management Science, 48(6), 782–801. https://doi.org/10.1287/mnsc.48.6.782.187
13.
BeaudryC., & LarivièreV. (2016). Which gender gap? Factors affecting researchers’ scientific impact in science and medicine. Research Policy, 45(9), 1790–1817. https://doi.org/10.1016/j.respol.2016.05.009
14.
BeckN., & KatzJ. N. (1995). What to do (and not to do) with time-series cross-section data. American Political Science Review, 89(3), 634–647. https://doi.org/10.2307/2082979
15.
BelenzonS., ShamshurA., & ZarutskieR. (2019). CEO’s age and the performance of closely held firms. Strategic Management Journal, 40(6), 917–944. https://doi.org/10.1002/smj.3003
16.
ChenH.-L., & HuangY.-S. (2006). Employee stock ownership and corporate R&D expenditures: Evidence from Taiwan’s information-technology industry. Asia Pacific Journal of Management, 23(3), 369–384. https://doi.org/10.1007/s10490-006-9005-4
17.
Cid-ArandaC., & López-IturriagaF. (2023). C.E.O. characteristics and corporate risk-taking: Evidence from emerging markets. Economic Research-Ekonomska Istraživanja, 36(2), 2175008. https://doi.org/10.1080/1331677X.2023.2175008
18.
CohenW., LevinR., & MoweryD. (1987). Firm size and R&D intensity: A re-examination (p. w2205). National Bureau of Economic Research. https://doi.org/10.3386/w2205
19.
CrociE., Del GiudiceA., & JankensgårdH. (2017). CEO age, risk incentives, and hedging strategy. Financial Management, 46(3), 687–716. https://doi.org/10.1111/fima.12166
20.
DemirelP., & MazzucatoM. (2012). Innovation and firm growth: Is R&D worth it?Industry & Innovation, 19(1), 45–62. https://doi.org/10.1080/13662716.2012.649057
21.
García MartínC. J., & HerreroB. (2020). Do board characteristics affect environmental performance? A study of EU firms. Corporate Social Responsibility and Environmental Management, 27(1), 74–94. https://doi.org/10.1002/csr.1775
22.
GuL. (2016). Product market competition, R&D investment, and stock returns. Journal of Financial Economics, 119(2), 441–455. https://doi.org/10.1016/j.jfineco.2015.09.008
23.
GuptaG. (2022). CEO’s age and investment-cash flow sensitivity. Managerial and Decision Economics, 43(6), 2212–2224. https://doi.org/10.1002/mde.3519
24.
HambrickD. C., & MasonP. A. (1984). Upper echelons: The organization as a reflection of its top managers. The Academy of Management Review, 9(2), 193. https://doi.org/10.2307/258434
25.
HarymawanI., NasihM., AgustiaD., RatriM., & NowlandJ. (2020). CEO & CFO education and R&D investment in Indonesia. Australasian Accounting, Business and Finance Journal, 14(2), 16–34. https://doi.org/10.14453/aabfj.v14i2.3
26.
HarymawanI., NasihM., RatriM. C., & NowlandJ. (2019). CEO busyness and firm performance: Evidence from Indonesia. Heliyon, 5(5), e01601. https://doi.org/10.1016/j.heliyon.2019.e01601
27.
HausmanJ. (2019). An econometric life. Journal of Econometrics, 211(1), 4–10. https://doi.org/10.1016/j.jeconom.2018.12.002
28.
HausmanJ. A., & TaylorW. E. (1981). Panel data and unobservable individual effects. Econometrica, 49(6), 1377. https://doi.org/10.2307/1911406
29.
IimuraA., & CrossJ. S. (2018). The impact of renewable energy on household electricity prices in liberalized electricity markets: A cross-national panel data analysis. Utilities Policy, 54, 96–106. https://doi.org/10.1016/j.jup.2018.08.003
30.
JensenM. C., & MecklingW. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
31.
KarolidisD., & VouzasF. (2019). Work group diversity dynamics: A novel approach to diversity research. Team Performance Management: An International Journal, 25(5/6), 348–368. https://doi.org/10.1108/TPM-07-2018-0043
32.
KesnerI. F., & DaltonD. R. (1994). Top management turnover and CEO succession: An investigation of the effects of turnover on performance. Journal of Management Studies, 31(5), 701–713. https://doi.org/10.1111/j.1467-6486.1994.tb00635.x
33.
LeeP. M., & O’NeillH. M. (2003). Ownership structures and R&D investments of U.S. and Japanese firms: Agency and stewardship perspectives. Academy of Management Journal, 46(2), 212–225. https://doi.org/10.2307/30040615
34.
LiY., & FooC. T. (2015). A sociological theory of corporate finance: Societal responsibility and cost of equity in China. Chinese Management Studies, 9(3), 269–294. https://doi.org/10.1108/CMS-12-2014-0232
35.
MinB. S., & SmythR. (2016). How does leverage affect R&D intensity and how does R&D intensity impact on firm value in South Korea?Applied Economics, 48(58), 5667–5675. https://doi.org/10.1080/00036846.2016.1181836
36.
Nsanyan SandowJ., DuoduE., & Oteng-AbayieE. F. (2021). Regulatory capital requirements and bank performance in Ghana: Evidence from panel corrected standard error. Cogent Economics & Finance, 9(1), 2003503. https://doi.org/10.1080/23322039.2021.2003503
37.
PrendergastC., & StoleL. (1996). Impetuous youngsters and jaded old-timers: Acquiring a reputation for learning. Journal of Political Economy, 104(6), 1105–1134.
38.
SchepkerD. J., KimY., PatelP. C., ThatcherS. M. B., & CampionM. C. (2017). CEO succession, strategic change, and post-succession performance: A meta-analysis. The Leadership Quarterly, 28(6), 701–720. https://doi.org/10.1016/j.leaqua.2017.03.001
39.
ScheuerC.-L., & LoughlinC. (2021). Seizing the benefits of age diversity: Could empowering leadership be the answer?Leadership & Organization Development Journal, 42(3), 495–515. https://doi.org/10.1108/LODJ-12-2019-0516
40.
SerflingM. A. (2014). CEO age and the riskiness of corporate policies. Journal of Corporate Finance, 25, 251–273. https://doi.org/10.1016/j.jcorpfin.2013.12.013
41.
VeugelersR. (2019). Trends at the frontier in corporate R&D in the digital era: Facts, prospects and policies. European Union. https://economy-finance.ec.europa.eu/system/files/2019-10/dp120_en.pdf
42.
WangZ., HuX., & YuF. (2023). How does CEO narcissism affect enterprise ambidextrous technological innovation? The mediating role of corporate social responsibility. PLoS One, 18(1), e0280758. https://doi.org/10.1371/journal.pone.0280758
43.
WithisuphakornP., & JirapornP. (2017). CEO age and CEO gender: Are female CEOs older than their male counterparts?Finance Research Letters, 22, 129–135. https://doi.org/10.1016/j.frl.2016.12.026
44.
YimS. (2013). The acquisitiveness of youth: CEO age and acquisition behavior. Journal of Financial Economics, 108(1), 250–273. https://doi.org/10.1016/j.jfineco.2012.11.003
45.
ZhuJ., GaoJ., & TanH. (2021). How the CEO power and age dissimilarity shape the chair-CEO pay gap: Empirical evidence from China. The North American Journal of Economics and Finance, 55, 101221. https://doi.org/10.1016/j.najef.2020.101221
46.
ZhuJ., GaoJ., & TanH. (2023). Mind the chair-CEO age dissimilarity: An implicit internal monitoring mechanism. Applied Economics Letters, 30(15), 2014–2019. https://doi.org/10.1080/13504851.2022.2089340
