TY - JOUR
T1 - Academy fellow independent directors and innovation
AU - Li, Sihai
AU - Quan, Yi
AU - Tian, Gary Gang
AU - Wang, Kun Tracy
AU - Wu, Stella Huiying
N1 - Publisher Copyright:
© 2021, The Author(s), under exclusive licence to Springer Science+Business Media, LLC part of Springer Nature.
PY - 2022/3
Y1 - 2022/3
N2 - Drawing on human capital theory, this paper develops a contingency approach to explore how independent directors’ scarce human capital affects innovation investment intensity and innovation outputs in the Chinese context. Controlling for the presence of ordinary technical independent directors (TIDs) and a range of other factors, we find that academy fellow independent directors (AFIDs) have an incremental positive effect on innovation investment intensity and innovation outputs, and that this effect exists only for non–state-owned enterprises (non-SOEs), which are more constrained in their ability and resources to pursue value-enhancing innovation activities. Our channel analyses suggest that AFIDs play a strong resource provision role in enhancing innovation. However, their positive role in promoting impactful innovation activities diminishes when they face intensified government intervention and political risk. We clearly document that regulations that are designed to impose only intense external monitoring of independent directors may have unintended negative consequences on innovation, particularly when firms’ demands for resource provision are intense, as is the case with firm innovation.
AB - Drawing on human capital theory, this paper develops a contingency approach to explore how independent directors’ scarce human capital affects innovation investment intensity and innovation outputs in the Chinese context. Controlling for the presence of ordinary technical independent directors (TIDs) and a range of other factors, we find that academy fellow independent directors (AFIDs) have an incremental positive effect on innovation investment intensity and innovation outputs, and that this effect exists only for non–state-owned enterprises (non-SOEs), which are more constrained in their ability and resources to pursue value-enhancing innovation activities. Our channel analyses suggest that AFIDs play a strong resource provision role in enhancing innovation. However, their positive role in promoting impactful innovation activities diminishes when they face intensified government intervention and political risk. We clearly document that regulations that are designed to impose only intense external monitoring of independent directors may have unintended negative consequences on innovation, particularly when firms’ demands for resource provision are intense, as is the case with firm innovation.
KW - Academy fellow independent directors
KW - Government intervention
KW - Human capital theory
KW - Innovation
KW - Ownership
UR - http://www.scopus.com/inward/record.url?scp=85098948091&partnerID=8YFLogxK
U2 - 10.1007/s10490-020-09749-3
DO - 10.1007/s10490-020-09749-3
M3 - Article
SN - 0217-4561
VL - 39
SP - 103
EP - 148
JO - Asia Pacific Journal of Management
JF - Asia Pacific Journal of Management
IS - 1
ER -