Management
Research insight
INVITED EDITOR
Editorial from
Cláudia Custódio & Miguel A. Ferreira Nova School of Business and Economics, and Pedro Matos, University of Virginia
July 16, 2024
9. Industry, innovation and infrastructure

9. Industry, innovation and infrastructure

Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
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Do general managerial skills spur innovation?

We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime of work experience produce more patents.

We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime of work experience produce more patents. We address the potential endogenous CEO-firm matching bias using firm-CEO fixed effects and variation in the enforceability of noncompete agreements across states and over time during the CEO's career. Our findings suggest that generalist CEOs spur innovation because they acquire knowledge beyond the firm's current technological domain, and they have skills that can be applied elsewhere should innovation projects fail. We conclude that an efficient labor market for executives can promote innovation by providing a mechanism of tolerance for failure.

Published in Management Science.

This content was originally published in Novafrica org.

Cláudia Custódio & Miguel A. Ferreira Nova School of Business and Economics, and Pedro Matos, University of Virginia
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