Market value of R&D, patents, and CEO characteristics
Abstract The contribution of knowledge capital to firm value has increased significantly, from 25% in the 1970s to 45% in the 2010s (Belo et al. in Decomposing firm value J Financ Econ 143:619–639, 2022). However, what influences firms’ ability to maximize the effect of knowledge capital on firm val...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2025-01-01
|
| Series: | Financial Innovation |
| Subjects: | |
| Online Access: | https://doi.org/10.1186/s40854-024-00676-6 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1841559163323285504 |
|---|---|
| author | Lipeng Wang Thanos Verousis Mengyu Zhang |
| author_facet | Lipeng Wang Thanos Verousis Mengyu Zhang |
| author_sort | Lipeng Wang |
| collection | DOAJ |
| description | Abstract The contribution of knowledge capital to firm value has increased significantly, from 25% in the 1970s to 45% in the 2010s (Belo et al. in Decomposing firm value J Financ Econ 143:619–639, 2022). However, what influences firms’ ability to maximize the effect of knowledge capital on firm value? Drawing on insights from upper echelons, agency, and behavioral agency theories, we show that CEO characteristics are crucial in enabling firms to take advantage of knowledge stock. We empirically demonstrate that short-term CEO compensation structures are detrimental to a firm’s ability to take advantage of its knowledge stock. We further show that CEO power enhances knowledge stock and R&D intensity. Our study provides direct empirical evidence of the importance of CEO compensation structure and corporate governance in understanding firm value in a knowledge economy. |
| format | Article |
| id | doaj-art-ad46ce3d9a7d4d74b39a7bbbb30609ee |
| institution | Kabale University |
| issn | 2199-4730 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj-art-ad46ce3d9a7d4d74b39a7bbbb30609ee2025-01-05T12:43:32ZengSpringerOpenFinancial Innovation2199-47302025-01-0111112410.1186/s40854-024-00676-6Market value of R&D, patents, and CEO characteristicsLipeng Wang0Thanos Verousis1Mengyu Zhang2Department of Innovation, Entrepreneurship and Strategy, School of Management, Zhejiang UniversityVlerick Business SchoolSheffield University Management School, University of SheffieldAbstract The contribution of knowledge capital to firm value has increased significantly, from 25% in the 1970s to 45% in the 2010s (Belo et al. in Decomposing firm value J Financ Econ 143:619–639, 2022). However, what influences firms’ ability to maximize the effect of knowledge capital on firm value? Drawing on insights from upper echelons, agency, and behavioral agency theories, we show that CEO characteristics are crucial in enabling firms to take advantage of knowledge stock. We empirically demonstrate that short-term CEO compensation structures are detrimental to a firm’s ability to take advantage of its knowledge stock. We further show that CEO power enhances knowledge stock and R&D intensity. Our study provides direct empirical evidence of the importance of CEO compensation structure and corporate governance in understanding firm value in a knowledge economy.https://doi.org/10.1186/s40854-024-00676-6InnovationPatentMarket valueCEO powerCEO compensation |
| spellingShingle | Lipeng Wang Thanos Verousis Mengyu Zhang Market value of R&D, patents, and CEO characteristics Financial Innovation Innovation Patent Market value CEO power CEO compensation |
| title | Market value of R&D, patents, and CEO characteristics |
| title_full | Market value of R&D, patents, and CEO characteristics |
| title_fullStr | Market value of R&D, patents, and CEO characteristics |
| title_full_unstemmed | Market value of R&D, patents, and CEO characteristics |
| title_short | Market value of R&D, patents, and CEO characteristics |
| title_sort | market value of r d patents and ceo characteristics |
| topic | Innovation Patent Market value CEO power CEO compensation |
| url | https://doi.org/10.1186/s40854-024-00676-6 |
| work_keys_str_mv | AT lipengwang marketvalueofrdpatentsandceocharacteristics AT thanosverousis marketvalueofrdpatentsandceocharacteristics AT mengyuzhang marketvalueofrdpatentsandceocharacteristics |