Top Management Human Capital, Inventor Mobility, and Corporate Innovation

Using panel data on top management characteristics and a management quality factor constructed using common factor analysis on individual management quality measures, we analyze the relation between top firm management quality and corporate innovation inputs and outputs. We show that top management quality is an important determinant of corporate innovation, with different individual aspects of management quality affecting innovation in younger and older firms differently. Further, firms with higher top management quality engage in more risky (“explorative”) innovation strategies. Finally, hiring more and higher quality inventors is an important channel through which higher management quality firms achieve greater innovation output