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 language | English |
|---|---|
| Pages (from-to) | 414-430 |
| Number of pages | 17 |
| Journal | Journal of Leadership and Organizational Studies |
| Volume | 24 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2017 Aug 1 |
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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
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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 journal › Article
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 -