Inventor CEOs in China

• In Event: Operational Environment & Financial Decisions

Abstract

This study provides new evidence on the complementary roles that top executives and the
government play in corporate innovation. Using novel Chinese patent data and information on
1,820 unique Inventor CEOs in China, we show that the presence of an Inventor CEO in a
state-owned enterprise (SOE) is associated with a higher number and quality of patents than in
a non-SOE. Furthermore, we find that Inventor CEOs receive a pay premium when they hold
the chairperson title as well. This result points to their high negotiating power stemming from
their innovation skills and dual executive role. We also find that firms with Inventor CEOs
experience greater analyst coverage suggesting that analysts attach a positive future firm value
when top executives have innovation experience.

Authors

• Ying Gan, Erasmus University Rotterdam

• Jing Huang, College of Accountancy, Central University of Finance and Economics

• Donghui Li, College of Economics, Shenzhen University

• Zunxin Zheng, College of Economics, Shenzhen University