Innovation intensity of military-connected firms
International Journal of Managerial Finance
ISSN: 1743-9132
Article publication date: 22 June 2021
Issue publication date: 8 March 2022
Abstract
Purpose
The study aims to examine the military-connected firms' risk preference, specifically in the innovation intensity level context. The authors argue that firms with military-experienced top management have conservative and risk-averse behavior, influencing the innovation investment policy.
Design/methodology/approach
The authors use nonfinancial Indonesian-listed firms from 2010 to 2018 amounted to 2,504 firm-year observations.
Findings
The authors document a negative relationship between military connection with both innovation activities and outputs. The additional analysis documents that risk-preferences of military-connected firms will be drastically changed when the industry has a high digital level, which confirms that risk-averse military-experienced management is less dominant with adaptation skill. The authors also identify that veterans did not need a long tenure to influence firms' innovation investment policy. Lastly, the result is robust due to various endogeneity tests employed.
Originality/value
This study further examines military-connected firms' technological innovation compared to prior studies and enriches the related literature.
Keywords
Acknowledgements
This study is funded by the Simlitabmas Penelitian Dasar 2018 research scheme. The authors also thank Prof. Alfred Yawson and the unknown reviewer for managing the manuscript.
Citation
Harymawan, I., Putra, F.K.G., Rizki, A. and Nasih, M. (2022), "Innovation intensity of military-connected firms", International Journal of Managerial Finance, Vol. 18 No. 2, pp. 365-397. https://doi.org/10.1108/IJMF-12-2020-0616
Publisher
:Emerald Publishing Limited
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