Executives' Multi-functional Background,attention To Innovation And Innovation Investment

There are many factors that affect firm innovation.Innovation investment is a field of company decision-making.In order to improve innovation,it is necessary to start from the analysis of corporate decision makers.Based on Upper Echelon Theory,the functional background can directly influence the behavior and thinking mode of executives.This paper believes that executives with multiple functional backgrounds can serve as "the keystone individual" in the internal innovation environment,to increase team knowledge,ease team friction,and promote knowledge transfer and learning.However,reviewing the core premise of Upper Echelon Theory again,using the executives' demographic characteristics solely to measure psychological characteristics is a valid but incomplete proxies,given that the executives' demographic characteristics affect the executives' cognition and preference firstly and,eventually,influence decision making.Based on the attention-based view,the attention of the TMT is an important reflection of team's cognition.This paper introduces the psychological characteristics of “attention to innovation”,and believes that the TMT's innovative attention plays the mediating role on the effect that the executive team's background characteristics on enterprise innovation investment.This paper takes the listed Small & Medium-sized Enterprises and Start-Up companies in 2011-2016 as research samples,based on Upper Echelon Theory and Attention-based view of the TMT.This research analyses the impact of executives with multi-functional background on corporate innovation investment,and introduced “attention to innovation” to study the specific effect of this mechanism.This article uses the Spider to download the sample firms' annual reports,applying textual analysis to measure the "attention to innovation" of the TMT.Through empirical analysis,the main conclusions are as follows:(1)The executives with multi-functional background can significantly improve the innovation investment;(2)The executives with multi-functional background pay more attention to innovation;(3)The executives with multi-functional background improve attention to innovation,and then increase the innovation investment.After verifying the main assumptions,this paper verified the reliability of the measurement of attention to innovation based on annual reports.In addition,this paper subdivides the multi-functional background into four models to study the impact of different models on innovation investment.The empirical results prove that the Output + Peripheral mode has a significant effect on the R&D investment.The Throughput + Peripheral mode diminishes the R&D investment significantly.Afterwards,in order to study the impact of executives' multi-functional background on the effect of innovation investment,this paper verifies whether the multi-functional background of executives can improve the efficiency of enterprise innovation investment.The empirical results prove that the multifunctional background of executives significantly promotes the efficiency of transforming innovative investment into output.The originality herein lies in that:(1)Based on the different results of current scholars' research on the heterogeneity of the TMT's functional background and enterprise innovation,this paper shifts the research perspective to the multi-functional background of the TMT members,expands the factors affecting the enterprise's innovation investment,and explores the impact of each multi-functional mode on innovation investment;(2)In the study of the mechanism of TMT's multi-functional background on innovation investment,the variable of “attention to innovation” is introduced to observe the psychological characteristics of multi-functional TMT members directly;(3)This paper uses the "Jieba" Chinese word segmentation module in Python to analyze the MD&A in the annual reports,use TF-IDF to extract keywords,and measure the "attention to innovation" of the TMT.The possible academic contributions are as follows:(1)This paper introduces the “multifunctional background” factor,which make up the influencing factors of firm innovation from the perspective of TMT human resource;(2)According to the core assumption of Upper Echelon Theory,this paper introduces the mediator--“attention to innovation” to observe the psychological characteristics of executives and perfects the specific mechanism that influences innovation investment by the multi-functional background of TMT;(3)Based on the empirical analysis,this paper verifies the attention to innovation is effective.Basically,the large amount of non-financial innovative information disclosure by TMT in the MD&A is not a “Say it” but a “Do it”.This paper also has guiding significance for the TMT's human resource practice.This study verifies that executives with multi-functional background can promote innovation investment.Therefore,when selecting TMT members,we must pay attention to import or cultivate the multifunctional background of TMT members,improve the knowledge storage and internal communication efficiency of TMT.