Title: The moderation effect of slack resources on the relationships between CEO characteristics and R&D expenditures

Authors: Ching-Wen Chen; Chin-Tsang Ho; Tsung-Che Tsai

Addresses: Department of Hospital and Health Care Administration, Chia Nan University of Pharmacy and Science, Tainan City 71710, Taiwan ' Department of Accounting and Information Technology, National Chung Cheng University, Chia-Yi, 62102, Taiwan ' Department of Assurance Services, PriceWaterHourse Coopers, Taipei City, 11012, Taiwan

Abstract: There are many references globally supporting the notion that innovation can raise the competitiveness of a firm, and that R&D expenditure is an appropriate measurement of innovation. The purpose of this paper is to investigate the relationship between a CEO's demographic characteristics and R&D expenditure. Considering the function of slack resources on incentive, risk buffer and strategy facilitation, this paper incorporates the slack resources variable into the relation between CEO characteristics and R&D expenditure. Slack resources have the ability to absorb losses caused by failures, which then increase the organisation's willingness to engage in risk-taking behaviour. The results reveal that CEOs with older age or higher education degree would consider if firm's resources are available or not when they invest R&D in technological industries. However, slack resources have no significant moderating effect on the relationships between CEOs with an engineering education background, shareholding and R&D expenditures.

Keywords: R&D expenditure; CEO characteristics; slack resources; demographic characteristics; technological industry; technical innovation; research and development; firm performance; incentives; risk buffers; strategy facilitation; age; education background; moderating effect; engineering education; shareholding.

DOI: 10.1504/IJBSR.2013.056668

International Journal of Business and Systems Research, 2013 Vol.7 No.4, pp.357 - 374

Published online: 28 Nov 2013 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article