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| CEO Career Horizon and Firm Innovation— From the Perspective of Real Option and Behavioral Theory of the Firm |
| Lyu Chan1, Liu Heying1，2 |
| 1. School of Business, Macau University of Science and Technology, Macao 999078; 2. Zhongyuan University of Technology, Zhengzhou 450000, China |
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Abstract In the context of innovation, a CEOs career horizon affects the flexibility with which the firm chooses its strategies, resulting in differences in innovation strategies between firms. This paper uses the publicly traded company data from 2009 to 2019 to examine the influence mechanism of CEO career horizon on firm innovation strategy in line with real option and behavioral theory of the firm (BTOF). The study finds that the broader a CEOs career horizon, the higher the level of the firms innovation, as is especially evidenced by a notable increase in the overall number of patent applications for invention, and when the firm faces internal operational challenges (historical aspiration shortfalls) as well as external dynamic environmental pressures (high economic policy uncertainty), the positive impact of the CEOs horizon on corporate innovation is more obvious. It also shows that such positive impacts are stronger in growing firms and nonstateowned ones.
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