Board of directors as a factor of firm performance in innovative companies

Irina Berezinets, Kirill Berezkin, Yuliya Ilina, Irina Naoumova

Research output

Abstract

The emerging markets undergo constant transformations and changes, and thus, a change of strategy can be critical for companies. However, the impact of R&D investment on firm performance and the role of the board of directors that makes decisions about a company's innovative activities remain inconclusive. This paper investigates the relationship between a board of directors' composition and structure in innovative companies and firm performance. Using the panel data of innovative Russian public companies that made R&D investments in 2011-2013, we found a positive relationship between the boards' independence and ROA as an indicator of firm performance. Moreover, it was shown that innovative companies that establish a strategy committee will on average have a higher ROA ratio than innovative companies without such a committee. Innovative firms in emerging markets might consider creating strategic committees and increasing board independence to enhance their performance and increase the number of successful R&D investments.
Original languageEnglish
Pages (from-to)N/A
JournalInternational Journal of Innovation Management
VolumeN/A
Issue numberN/A
DOIs
Publication statusE-pub ahead of print - 2018

Fingerprint

Industry
Firm performance
Factors
Board of directors
Emerging markets
Board independence
Chemical analysis
Company performance
Panel data
Innovative activity

Scopus subject areas

  • Business, Management and Accounting(all)

Cite this

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title = "Board of directors as a factor of firm performance in innovative companies",
abstract = "The emerging markets undergo constant transformations and changes, and thus, a change of strategy can be critical for companies. However, the impact of R&D investment on firm performance and the role of the board of directors that makes decisions about a company's innovative activities remain inconclusive. This paper investigates the relationship between a board of directors' composition and structure in innovative companies and firm performance. Using the panel data of innovative Russian public companies that made R&D investments in 2011-2013, we found a positive relationship between the boards' independence and ROA as an indicator of firm performance. Moreover, it was shown that innovative companies that establish a strategy committee will on average have a higher ROA ratio than innovative companies without such a committee. Innovative firms in emerging markets might consider creating strategic committees and increasing board independence to enhance their performance and increase the number of successful R&D investments.",
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AU - Berezkin, Kirill

AU - Ilina, Yuliya

AU - Naoumova, Irina

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