Inventor executive turnover and inventors' high-quality innovation in China

Abstract

This paper investigates how inventor executive turnover affects inventors' high-quality innovation behaviors using data from Chinese high-tech listed companies from 2007 to 2018. We find that inventor executive turnover significantly enhances the quality of inventors' innovation, and this positive effect depends on the characteristics of the departing executive and their successor as well as the firm's reliance on innovation. Further, the mechanism tests show that increasing innovation quality is mainly reflected in non-cooperative inventors and non-core research and development (R&D) team inventors, and inventor executive turnover leads to more new inventors and higher innovation efficiency, which is consistent with the resource reallocation channel. We also find that the resource reallocation effect is stronger for general inventor executives rather than top inventor executives (CEO or chairman), and that inventor executive turnover boosts the total number of patent applications and the share of invention patents at the firm level. Overall, our findings suggest that to realize innovation-driven growth regime, inventors' efforts should be stimulated by optimizing the allocation of R&D resources.