CEO ability, career concerns, firms’ lifecycle and investments in intellectual capital

Document Type

Journal Article

Publication Title

International Review of Economics & Finance

Volume

75

First Page

237

Last Page

251

Publisher

Elsevier

School

School of Business and Law

RAS ID

35542

Comments

Nadeem, M., Zaman, R., Suleman, T., & Atawnah, N. (2021). CEO ability, career concerns, firms’ lifecycle and investments in intellectual capital. International Review of Economics & Finance, 75, 237-251. https://doi.org/10.1016/j.iref.2021.04.023

Abstract

We argue that the managerial ability of CEOs facing different career concerns can explain significant variation in firms’ investments in intellectual capital (IC), an important corporate strategic decision, and the driver of competitive advantage. Under the umbrella of Resource Based Theory, using a large sample of US firms, we find that CEOs’ managerial ability has a significant positive relation with investments in human, innovation and relational capital. This relationship is weaker when CEOs actually face lower career concerns. Furthermore, the relationship is less (more) pronounced in firms at the introduction (decline) stage of their lifecycle. Our results are robust to a range of sub-samples, alternative variable definitions and model specifications. The findings are important for firms embarking on building IC stocks, essential for firm's survival in the knowledge-economy era.

DOI

10.1016/j.iref.2021.04.023

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