Managers’ Military Experience On Corporate R&D Investment

For a long time,innovation has been regarded as one of the important strategies for the sustainable development of a company.In recent years,the government always emphasizes the importance of innovation for enterprises.The R&D investment of enterprises has grown rapidly,but the differences of R&D investment between companies have become more obvious.As for the reasons,the existing literature studies usually explain it from the traditional ways including companies,industries,and markets.However,with the development of “upper echelon theory” and the psychology research,scholars have gradually relaxed the assumption of “rational economic man”.Compared with the traditional views,“the personal characteristics of managers can influence the decision-making of enterprises” is also increasingly recognized by the academic community.Since the reform and opening up,more and more veterans have been engaged in the wave of economic construction.Most people have gradually become part of the top management team of Chinese enterprises.Many literatures have shown that as an early personal background feature of managers,military experience can indirectly affect corporate management activities.But few people studied the influence of military experience of managers on enterprise’s R&D investment.Therefore,this article intends to find out the relationship between military experience of managers and enterprise’s R&D investment,hoping to provide some advice for enterprises to hire military background managers and help them to establish their own businesses.This paper mainly studies the influence of managers’ military experience on the R&D investment of enterprises.Firstly,it reviews the literature of managers’ personal characteristics and the literature of enterprise decision-making influenced by managers.Secondly,it summarizes the existing literature and analyzes the logical relationship between the military experience of managers and R&D investment.By using the data of China’s A-share listed manufacturing firms from 2007 to 2016,this paper investigates the relationship between military service of managers and R&D investment.The following conclusions have been drawn: Firstly,managers with military experience are more willing to innovate.Secondly,such effect is more significant in state-owned enterprises than in non-state enterprises.The article classify managers’ early military experience into three categories: the experience of army service,the education experience of military academy and the experience of military enterprises and find the early education experience of military academy and the experience of military enterprises are positively related to R&D investment,while the experience of army service is negatively correlated with R&D investment.Further,good corporate governance will restrict the behavior of managers and reduce the possibility of increasing R&D investment.