Date of Award
Ph.D. in Business Administration
In Part 1, I study if CEOs with innovative ability impose a cost upon their firms. I find that while there is a positive effect of a CEO’s innovative ability on firm innovation, the benefit is only when CEO’s innovative ability is useful for the firm. Further, firms with innovator CEOs spend more on R&D projects but with lower efficiency and hold more cash but with lower cash value compared to firms with non-innovator CEOs. These results suggest that innovator CEOs create an overinvestment problem. In Part 2, I study the effects of talent cycling on IPO long-run performance and the consequences to the IPO market. Talent cycling in initial public offerings refers to the job seeking behavior in high-tech firms where talented patent inventors leave once an IPO is successful and then pursue another job at a private firm. In my sample, I find that 36% of IPO firms have patent inventors who went to a non public firm within one year after an IPO and those inventors are the best talent in the firm. The negative side of talent cycling is that firms affected by talent cycling underperform firms unaffected by talent cycling for up to four years post IPO, while the positive side of talent cycling is the increase of the probability of an IPO in the economy. In robustness tests, I show that talent cycling is different from human capital loss and the results are robust to different time periods, such as bubble periods and hot market periods. In Part 3, I study the impact of an innovator CEO on the IPO’s underpricing, long-run performance, and post-IPO innovation. I find that since CEOs’ innovative ability can reduce the information asymmetry in the IPO market, firms led by innovator CEOs experience lower first-day return (less underpricing) compared to firms led by non-innovator CEOs. Firms with innovator CEOs have greater IPO long-run performance compared to firms with non-innovator CEOs. I also find that firms with innovator CEOs have more firm innovation up to four years after the IPO compared to firms with non-innovator CEOs.
Lin, Zhilu, "Innovation, CEOs, and IPOs" (2019). Electronic Theses and Dissertations. 1656.