关键词: CEO职能经历丰富度, 创新质量, 融资约束, 内部控制

Abstract:

    Aiming at creating a novel development paradigm that perceives domestic circulation as the mainstay as well as fosters domestic and international circulations reinforcing each other, it is imperative to enhance firms′ independent innovation ability and nurture powerful scientific and technological forces, which promotes the innovation development at an accelerated pace. First, firms accelerate the technological progress and step up the scientific and technological innovation. What′s more, they play a pivotal role in promoting the national innovation capability and the strategy of innovation-driven development. Driven by realizing the self-reliance in science and technology as well as strengthening the national strategic scientific and technological forces, the firms′ innovation quality has become the hot focus in both theoretical and practical fields. In particular, among the factors influencing innovation quality, CEO′s functional experience richness is the most important. As a result, we integrate upper echelons theory, Stewardship theory and knowledge management theory to conduct further research about this issue.

     Using the data of listed companies from 2010 to 2018 in Shanghai and Shenzhen Stock Exchanges, we explore the relationship between CEO′s functional experience richness and firms′ innovation quality by conducting empirical analysis, and then critically analyze the effects of CEO′s functional experience on the firms′ innovation quality. In this paper, we focus on the functional experience that helps to build CEO′s individual management ability, and distinctly place emphasis on how the CEO′s functional experience richness affects the most important factor which drives the growth of the firms: the innovation quality. Moreover, we have found that the internal transmission mechanism of this relationship follows the order: CEO′s experience-ability-mindset-decision-performance. As a result, we obtain the following research findings: The CEO′s functional experience richness is significantly and positively correlated with the firms′ innovation quality. On the one hand, CEOs with abundant functional experiences reduce the firms′ financing constraint, which ensures their capital demands for innovation. On the other hand, CEOs with abundant functional experiences advance the construction of internal control procedure, which in turn reduces the internal agency costs and promotes firms′ innovation quality. In addition, considering there is a hysteresis of the results and the endogeneity between the independent variables and the control variables, we delay the dependent variable, the technological innovation quality, by one stage. Additionally, we conduct the robustness test by changing the method of testing the mediating effect, the measurement method of dependent variable and the regression model.

     The theoretical contributions of this paper are as follows: (1) This research enriches the theoretical basis of firms′ innovation quality affected by CEO′s functional experiences. From the perspective of CEO′s diverse working experiences, we analyze its economic consequences to firms′ innovation, and form an extension and supplement to the extant research; (2) By evaluating the effect of CEO′s individual functional experience richness on the efficiency and quality of firms′ innovative decision-making, we fertilize the application of Upper Echelons Theory in the context of Chinese firms; and (3) We conclude the internal mechanism of how firms′ innovation quality is promoted, which creates research achievement related to the affecting factors and the internal transmission mechanism of firms′ innovation quality.

      In addition, the results of the study have several managerial implications: (1) The innovative talents should be precisely invested under careful consideration. In terms of the investment of innovative talents, it is not limited in the core technological researchers and general scientific managers, firms should pour attention into investing high level innovative leaders, because it is the key to build the innovative society and the innovative organizations; (2) It is smart to cultivate new innovative leaders as well as value the succession of CEOs at the same time. In order to solve the practical innovative problems of Chinese firms, the fundamental solution is the renaissance of the innovation leaders; (3) There is a creative way to solve the difficulty in financing. First, all the firms should explicitly recognize the unique role of CEO resources in the overall market resource allocation. They need to ensure CEOs with abundant functional experiences are allocated properly and get scientific training. Secondly, firms should value the effects of rational allocation of CEO resources because it is conducive to promoting the efficient allocation of the secondary resources in the firm as well as increasing the conductivity and symbiosis of the value creation. Once the firm could take appropriate measures to stimulate the multiplied effect of CEO resources in the process of value creation, the difficulty of financing, which is perceived as the barrier to the development, will be solved completely.

Key words: CEO′s functional experience richness, innovation quality, financing constraint, internal control