Executives' Legal Expertise and Corporate Innovation

IF 4.6 3区管理学 Q1 BUSINESS Corporate Governance-An International Review Pub Date : 2024-03-25 DOI:10.1111/corg.12578

Yunhao Dai, Xinchu Tong, Xiao Jia

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Abstract

Research Question

This study investigates whether and how executives with legal expertise impact corporate innovation.

Research Findings

Using a sample of listed firms in China, we have the following findings: (1) Firms that hire executives with legal expertise are associated with more corporate innovation. (2) These firms talk about potential legal risks and legal advisors more often in their annual reports and have lower chances of being sued in patent litigations. (3) The innovation-promoting effect is stronger when the firms are state-owned enterprises, have more overseas revenue, operate in high-tech industries, have prior patent litigation experience, and are in strong legal environments.

Theoretical/Academic Implications

The findings indicate that executives with legal expertise bring more attention to legal risks and help the firm to shape a stable environment, which can effectively promote innovation activities. Also, the innovation-promoting effect of lawyer executives complements the role of in-house legal counsels and the external legal environment. This paper adds to the literature on the value of executives with legal background.

Practitioner/Policy Implications

Our results emphasize the important role played by executives with legal expertise in corporate innovation. Given the continuing shortage of legal talents and the gradual improvement of the legal system in China, firms need to employ more legal talents to avoid potential legal risks and maintain sustainable growth.

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高管的法律专业知识与企业创新

本研究调查了具有法律专业知识的高管是否以及如何影响企业创新。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.

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