Seminar by Dr. Benjamin Balsmeier, KU Leuven
Event details
| Date | 16.10.2015 |
| Hour | 12:00 › 13:30 |
| Speaker | Dr. Benjamin Balsmeier, KU Leuven |
| Location | |
| Category | Conferences - Seminars |
"Independent Boards and Innovation"
Abstract
Much research has suggested that independent boards of directors are more effective in reducing agency costs and improving firm governance. Less clear, however, is how they influence innovation and innovation search strategies. We argue that the increased oversight of independent boards results in both greater managerial effort and risk aversion; as a result, firms invent more but less novel patents. Relying on regulatory changes for identification, we show that firms that transition to independent boards focus on more crowded and familiar areas of technology. They patent and claim more and receive more total future citations to their patents, though the citation increase comes mainly from incremental patents in the middle of the distribution; the numbers of uncited and highly cited patents - arguably corresponding to riskier and completely failed or breakthrough inventions, respectively - do not change significantly.
Keywords: Corporate Governance, Innovation, Patents, Board Composition, Independent Directors
Authors
Benjamin Balsmeier, Lee Fleming, and Gustavo Manso
Abstract
Much research has suggested that independent boards of directors are more effective in reducing agency costs and improving firm governance. Less clear, however, is how they influence innovation and innovation search strategies. We argue that the increased oversight of independent boards results in both greater managerial effort and risk aversion; as a result, firms invent more but less novel patents. Relying on regulatory changes for identification, we show that firms that transition to independent boards focus on more crowded and familiar areas of technology. They patent and claim more and receive more total future citations to their patents, though the citation increase comes mainly from incremental patents in the middle of the distribution; the numbers of uncited and highly cited patents - arguably corresponding to riskier and completely failed or breakthrough inventions, respectively - do not change significantly.
Keywords: Corporate Governance, Innovation, Patents, Board Composition, Independent Directors
Authors
Benjamin Balsmeier, Lee Fleming, and Gustavo Manso
Practical information
- General public
- Free
Organizer
- College of Management of Technology
Contact
- cdm-seminars@epfl.ch