CEO characteristics and R&D expenditure of IPOs in China

Abstract

In the rapidly evolving landscape of Mainland China's stock market, there is a substantial correlation between the research and development (R&D) spending of companies that are going through initial public offerings (IPOs) and the characteristics of the CEO. This study aims to investigate how CEO traits influence the allocation of resources towards R&D activities within the context of IPOs in Mainland China. The CEO plays a pivotal role in shaping the strategic direction and innovation agenda of companies, especially during the IPO process where firms seek to raise capital and expand their operations. Policymakers must comprehend the influence of CEO attributes on research and development spending, investors, and managers seeking to foster innovation and sustainable growth in Mainland Chinese firms. This research will focus on analyzing CEO traits such as educational background, prior experience, age, tenure, risk aversion, and management style, and their influence on the decision-making process regarding R&D investment. This study intends to determine significant links between R&D expenditure and characteristics of CEOs by looking at a sample of IPOs in the stock market of Mainland China. The analysis takes into account many factors like industry competition, market dynamics, regulatory environment, and firm-specific traits. Data on CEO traits, company finances, and R&D spending will be analysed using quantitative techniques like regression analysis and event research procedures. Furthermore, qualitative research techniques like case studies and interviews will offer deeper understandings of the contextual elements influencing the IPO market in Mainland China as well as the mechanisms underpinning these linkages. All things considered, this study will advance knowledge of how CEO traits affect R&D spending in the particular setting of initial public offerings (IPOs) on the stock market of Mainland China. The findings will offer valuable insights for policymakers, investors, and managers navigating the complexities of fostering innovation and sustainable growth in Mainland Chinese firms undergoing IPOs.