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korean management review - Vol. 49 , No. 6

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korean management review - Vol. 49, No. 6, pp. 1415-1452
Abbreviation: kmr
ISSN: 1226-1874 (Print)
Print publication date 31 Dec 2020
Received 13 Apr 2020 Revised 15 Jul 2020 Accepted 05 Aug 2020
DOI: https://doi.org/10.17287/kmr.2020.49.6.1415
CEO Turnover and R&D Investment
Ji-Ho Ryu ; Heejung Kim
(First Author) Currently a Chief Researcher at Korea Institute for Robot Industry Advancement(KIRIA) (thanks@kiria.org)
(Corresponding Author) Currently a Senior Officer at Korea Aerospace Research Institute(KARI) (phdhjkim@naver.com)
최고경영자 교체와 연구개발투자

Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study empirically analyzed the impact of variables related to CEO turnover on R&D investment, such as CEO turnover rate, timing of turnover, and type of turnover. In addition, the study examined the impact of Chaebol governance on the relationship between CEO turnover and R&D investment. It was aimed at explaining the phenomenon of continuous R&D investment being made even during the relatively short term tenure of CEOs of Korean firms through the moderating effect of Chaebol governance. The empirical analysis results are as follows. First, the more frequent CEO changes were made, the less R&D investment was made. Second, an analysis of R&D investment before and after CEO turnover showed that R&D investment decreased significantly in the year of turnover and one year after the turnover of CEO. Third, the effect on R&D investment was different depending on the type of CEO turnover. Fourth, as a result of considering Chaebol governance structure at the same time, it was confirmed that Chaebol governance controled the inducement for reducing R&D investment due to the replacement of CEO of individual company. These results suggest that studies should simultaneously consider the effects of Chaebol governance, along with the characteristics of individual firms.


Keywords: CEO Turnover, R&D Investment, Chaebol governance, Opportunistic behavior

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∙ The author Ji-Ho Ryu is currently a Chief Researcher at Korea Institute for Robot Industry Advancement(KIRIA). He received a bachelors’ degree, a master’s degree, and Ph. D. in business administration from Kyungpook National University. His primary fields of interest are Intangible assets, R&D expenditure behavior, Corporate governance, Agency theory

∙ The author Heejung Kim is currently a Senior Officer at Korea Aerospace Research Institute(KARI). She received a bachelors’ degree, a master’s degree, and Ph. D. in business administration from Kyungpook National University. Her primary fields of interest are R&D investment, Earnings management, Information Effect, Corporate governance, Engineering Accounting.