A CEO Value Perspective of Corporate Innovation Strategy: Evidence from China

Abstract

This paper theorizes and tests how chief executive officer (CEO)’s value of self-enhancement and self-transcendence, influence corporate innovation activities. We hypothesize that CEOs’ values of self-enhancement — focusing on the leader’s own benefit — would relate negatively to corporate innovation strategy and outcomes, whereas self-transcendent values — focusing on others’ benefits — would relate positively to corporate innovation. Using a longitudinal archival data of publicly listed companies in China during 2010 — 2014, we tested our hypotheses and found supportive evidences, further analyses show different combination of the two types of fundamental values predicts different corporate innovation activities and outcomes. By addressing the question of why some Chinese companies are lack of innovation and some other are devoted to innovative activities, this paper offers a new lens of corporate leader’s personal characteristics on a firm's business strategy, and explain how CEO’s value orientation of self-transcendence and self-enhancement can be manifested in the corporate innovation strategy and innovation performance.