CFO Power And Enterprise Innovation

Innovation is the source of lasting competitiveness,which is closely linked to the sustainability of the business,as well as a country’s technological self-reliance and self-improvement,and a key move in China’s high-quality economic development.From the perspective of upper echelon theory,the impact of CEO’s characteristics on innovation performance has received widespread attention.Whether CFOs will have an impact on enterprise innovation performance is rarely discussed.With the improvement of the corporate governance system of listed companies,CFOs have gradually broken through the traditional financial functions and can influence the innovation performance of enterprises through strategic support,resource allocation and other ways.The study of the impact of CFO power on corporate innovation therefore has both theoretical and practical implications.This paper compares relevant domestic and international research on CFO characteristics and corporate governance,corporate innovation performance,executive characteristics and corporate innovation,combines managerial power theory,upper echelon theory and information asymmetry theory,proposes research hypotheses,and tests them empirically.From 2010 to 2017,a total of 5133 samples of 1432 Chinese listed companies were collected.To portray the CFO power in four dimensions: organization,expertise,reputation and ownership,Through multiple regression,propensity score matching method and other methods,the impact of CFO power on enterprise innovation performance,as well as the analyst following moderating effect and the mediating role of financing constraints and market orientation.were examined.The results show that:(1)Higher CFO power leads to the worse innovation performance of enterprises,and the finding still holds after robustness testing.(2)Analyst following moderates the weakening effect of CFO power on enterprise innovation performance.The more analyst following,the weaker effect of CFO power on enterprise innovation performance will be inhibited.(3)Financing constraints and market-oriented strategies are the intermediary variables between CFO power and enterprise innovation performance.CFOs with greater power will intensify the level of financing constraints and inhibit market-oriented strategies to weaken enterprise innovation performance.This paper extends the study of the influencing factors of corporate innovation from a fresh perspective.The study enriches the literature related to top echelon theory and has certain implications for improving corporate governance and promoting corporate innovation.