CEO COMPENSATION, OVERCONFIDENCE and CORPORATE INNOVATION. EVIDENCE FROM U.S. LISTED FIRMS

• Main Authors: Ahmad Juliana, 尤安馬
• Other Authors: Hai-Chin Yu
• Format: Others
• Language: en_US
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/dd7wt8

博士 === 中原大學 === 商學博士學位學程 === 106 === This study examines whether CEO compensation moderates the relationship between CEO overconfidence and corporate innovation in U.S. listed firms. Theory predicts that proper types of compensationcould foster corporate innovation, whereas overconfident CEOs prevent innovation. By using a new CEO and maximum state-tax as instrumental variables, we find that variouscompensations significantly moderate the relationship between overconfidence and innovation. These compensation schemes may be applied in various means given that various types of CEOs compensation indicate different incentives. CEO attributes of overconfidence and innovation activities are used in these compensation schemes. We also find that the Sarbanes–Oxley Act (SOX) facilitates transparent and accurate information, and the act narrowsdown the gap in innovation between large and small firms. By using difference-in-difference analysis, we confirm that total and stock compensation obtains substantial benefits from SOX and positively fosters corporate innovation.