This study examines the influence of CEO characteristics on firm innovation within the Australian market, using R&D expenditure as a proxy for innovation. The aim is to analyze how factors such as CEO gender, educational background and dual roles (CEO-chairman) impact firms' R&D investment across various industries.
Panel and Tobit regression models are employed to assess the relationship between CEO characteristics and R&D expenditure. The study controls for endogeneity and applies firm-level control variables to ensure robustness, examining CEO traits like gender, educational qualifications and CEO-chairman duality.
The study reveals that CEO gender and educational level significantly impact firm innovation, particularly R&D expenditure, compared to other characteristics like CEO-chairman duality. Female CEOs and those with PhD degrees are associated with higher R&D spending, with variations across industries such as basic materials and healthcare.
The study is limited by its focus on Australian firms and the time span of 2006–2016. Additionally, mixed results for CEO-chairman duality and CEO location may reduce the generalizability of the findings across all industries on the ASX.
The findings highlight the importance of gender diversity and CEO education in driving firm innovation. Companies aiming to enhance competitiveness and performance through R&D activities, especially in industry-specific contexts, should consider these CEO characteristics.
This study provides novel insights by analyzing the impact of CEO characteristics, such as gender and education level, on firm innovation in the underexplored Australian market. By using R&D expenditure as a proxy for innovation and employing both panel and Tobit regression models, it highlights the significance of CEO traits, particularly in specific industries. The findings emphasize the stronger influence of CEO gender and educational level compared to CEO-chairman duality and location, offering valuable implications for gender diversity and industry-specific innovation strategies in enhancing firm competitiveness.
