Academic CEOs and Corporate Innovation

In this paper, we investigate the net impact of CEOs with academic experience, i.e., academic CEOs, on corporate innovation. We show that firms managed by academic CEOs generate a significantly greater quantity of patents with higher citations. This positive effect is driven by the higher managerial innovation aspirations. In addition, we show that while there is a gradual increase in innovation following the entry of new academic CEOs, there is a clear decrease in innovation following the departure of academic CEOs. This net effect is more pronounced when the focal academic CEOs are young. Based on exogenous CEO turnover, we demonstrate that the association of CEO academic experience with innovation is likely causal. Moreover, we find that the net effect of academic CEOs on innovation concentrates in innovation-intensive industries. Furthermore, we show that academic experience identifies a broad set of CEOs with a positive impact on corporate innovation. Finally, our results suggest that academic CEOs improve firm innovation by leveraging their academic networks to access valuable resources, such as establishing collaborations with academic institutions and securing government support.