Do strategic leaders drive success in innovation performance? An empirical analysis of innovation in the US hi-technology and pharmaceutical sectors and the Malaysian palm oil industry

Abstract

This thesis investigates the relationships between strategic leaders and innovation performance as well as the ways in which governance mechanisms influence that relationship. Specifically, the first core chapter inspects the associations between a powerful CFO and innovation performance, and the effect of financial slack and CEO power on the association in US high-technology listed firms from 1998 to 2018. The findings show that a powerful CFO is associated with greater innovation performance and is further strengthened when firms have higher levels of financial slack. This implies that greater cash flow provides the powerful CFO with more opportunities to invest in innovation, producing greater outcomes and achieving higher innovation efficiency. On top of that, abundant financial slack motivates powerful CFOs to explore more internal innovation strategies. Nevertheless, the link between a powerful CFO and innovation performance is weakened when there is a conflict of power between CFO and CEO. The second core chapter examines the association between CEO compensation and innovation performance and the implications of government’s regulations on the link in US pharmaceutical-listed firms from 1998 to 2018. The findings advocate that a CEO with high compensation is associated with greater R&D
investment and technology acquisition, and prefers internal innovation strategy over purchasing external technology. However, a highly paid CEO is linked with less expenditure both in R&D and technology purchasing in the event of the government introducing or amending the industry’s regulations. Any introduction or amendment of the industry’s regulations also causes the CEO to prefer acquiring external technology over investing in internal innovation strategies. The third core chapter explores the relationship between political affiliation and innovation input intensity and the impact of board diversity on the association in the Malaysian palm oil industry from 2008 to 2018. The findings suggest that firms with political affiliation are associated with lower innovation input intensity, thus, refutes the assumption of engaging politically connected directors are beneficial for industry that is closely related to the national policies. However, the presence of more female directors on board has brought a positive impact on the link. This denotes greater gender diversity is able to align the interests of politically affiliated directors with firms' innovation agenda.

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Identifiers

ORCID for Ming-Chien Sung: orcid.org/0000-0002-2278-6185

ORCID for Eng Cheah: orcid.org/0000-0003-2953-3815

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