CEO Overconfidence and Ambidextrous Innovation

Ying Jiuan Wong, Cheng Yu Lee, Shao Chi Chang

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

While prior research has focused on the effect of CEO overconfidence on innovation, few studies have been conducted to reveal how and whether an overconfident CEO affects ambidextrous innovation, which means the simultaneous and balanced pursuit of both exploratory and exploitative innovation. By observing firms’ patenting behavior, we investigate the effect of CEOs’ psychological attribute of overconfidence on innovation ambidexterity. In addition, we examine how a firm’s governance system moderates the relationship between CEO overconfidence and ambidextrous innovation. The results show that overconfident CEOs are more apt to create or magnify an imbalance in innovation ambidexterity. Furthermore, the results regarding the moderating effects of governance and monitoring mechanisms indicate that an independent board and dedicated institutional ownership mitigate the positive relationship between CEO overconfidence and a firm’s ambidextrous imbalance, while transient institutional ownership enhances this relationship. We also find that analyst following does not effectively monitor an overconfident CEO’s tendency toward an ambidextrous imbalance.

Original languageEnglish
Pages (from-to)414-430
Number of pages17
JournalJournal of Leadership and Organizational Studies
Volume24
Issue number3
DOIs
Publication statusPublished - 2017 Aug 1

Fingerprint

innovation
firm
governance
Chief executive officer
Overconfidence
Innovation
monitoring
Imbalance
Institutional ownership
Ambidexterity
Governance

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Sociology and Political Science
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management Science and Operations Research

Cite this

Wong, Ying Jiuan ; Lee, Cheng Yu ; Chang, Shao Chi. / CEO Overconfidence and Ambidextrous Innovation. In: Journal of Leadership and Organizational Studies. 2017 ; Vol. 24, No. 3. pp. 414-430.
@article{ef5ae12033b848e68e8051f637545fbc,
title = "CEO Overconfidence and Ambidextrous Innovation",
abstract = "While prior research has focused on the effect of CEO overconfidence on innovation, few studies have been conducted to reveal how and whether an overconfident CEO affects ambidextrous innovation, which means the simultaneous and balanced pursuit of both exploratory and exploitative innovation. By observing firms’ patenting behavior, we investigate the effect of CEOs’ psychological attribute of overconfidence on innovation ambidexterity. In addition, we examine how a firm’s governance system moderates the relationship between CEO overconfidence and ambidextrous innovation. The results show that overconfident CEOs are more apt to create or magnify an imbalance in innovation ambidexterity. Furthermore, the results regarding the moderating effects of governance and monitoring mechanisms indicate that an independent board and dedicated institutional ownership mitigate the positive relationship between CEO overconfidence and a firm’s ambidextrous imbalance, while transient institutional ownership enhances this relationship. We also find that analyst following does not effectively monitor an overconfident CEO’s tendency toward an ambidextrous imbalance.",
author = "Wong, {Ying Jiuan} and Lee, {Cheng Yu} and Chang, {Shao Chi}",
year = "2017",
month = "8",
day = "1",
doi = "10.1177/1548051817692329",
language = "English",
volume = "24",
pages = "414--430",
journal = "Journal of Leadership and Organizational Studies",
issn = "1548-0518",
publisher = "SAGE Publications Inc.",
number = "3",

}

CEO Overconfidence and Ambidextrous Innovation. / Wong, Ying Jiuan; Lee, Cheng Yu; Chang, Shao Chi.

In: Journal of Leadership and Organizational Studies, Vol. 24, No. 3, 01.08.2017, p. 414-430.

Research output: Contribution to journalArticle

TY - JOUR

T1 - CEO Overconfidence and Ambidextrous Innovation

AU - Wong, Ying Jiuan

AU - Lee, Cheng Yu

AU - Chang, Shao Chi

PY - 2017/8/1

Y1 - 2017/8/1

N2 - While prior research has focused on the effect of CEO overconfidence on innovation, few studies have been conducted to reveal how and whether an overconfident CEO affects ambidextrous innovation, which means the simultaneous and balanced pursuit of both exploratory and exploitative innovation. By observing firms’ patenting behavior, we investigate the effect of CEOs’ psychological attribute of overconfidence on innovation ambidexterity. In addition, we examine how a firm’s governance system moderates the relationship between CEO overconfidence and ambidextrous innovation. The results show that overconfident CEOs are more apt to create or magnify an imbalance in innovation ambidexterity. Furthermore, the results regarding the moderating effects of governance and monitoring mechanisms indicate that an independent board and dedicated institutional ownership mitigate the positive relationship between CEO overconfidence and a firm’s ambidextrous imbalance, while transient institutional ownership enhances this relationship. We also find that analyst following does not effectively monitor an overconfident CEO’s tendency toward an ambidextrous imbalance.

AB - While prior research has focused on the effect of CEO overconfidence on innovation, few studies have been conducted to reveal how and whether an overconfident CEO affects ambidextrous innovation, which means the simultaneous and balanced pursuit of both exploratory and exploitative innovation. By observing firms’ patenting behavior, we investigate the effect of CEOs’ psychological attribute of overconfidence on innovation ambidexterity. In addition, we examine how a firm’s governance system moderates the relationship between CEO overconfidence and ambidextrous innovation. The results show that overconfident CEOs are more apt to create or magnify an imbalance in innovation ambidexterity. Furthermore, the results regarding the moderating effects of governance and monitoring mechanisms indicate that an independent board and dedicated institutional ownership mitigate the positive relationship between CEO overconfidence and a firm’s ambidextrous imbalance, while transient institutional ownership enhances this relationship. We also find that analyst following does not effectively monitor an overconfident CEO’s tendency toward an ambidextrous imbalance.

UR - http://www.scopus.com/inward/record.url?scp=85025079027&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85025079027&partnerID=8YFLogxK

U2 - 10.1177/1548051817692329

DO - 10.1177/1548051817692329

M3 - Article

AN - SCOPUS:85025079027

VL - 24

SP - 414

EP - 430

JO - Journal of Leadership and Organizational Studies

JF - Journal of Leadership and Organizational Studies

SN - 1548-0518

IS - 3

ER -