| Summary: | 碩士 === 東吳大學 === 企業管理學系 === 101 === In the competitive environment, firms’ ability of innovation is a key to enhancing the competitive advantages and creating profits. Due to the separation of ownership and management, the interests of shareholders and managers are inconsistent on innovation. The role of the Director is to monitor management for shareholders and reduce agency costs. Rather than being viewed as homogeneity by previous studies, outside directors with different backgrounds are in fact heterogeneous. And having multiple directorships also helps outside directors establish connections and accumulate abundant resources.
The purpose of this study is to examine the effect of multiple directorships on firm’s innovation, and the moderating effect of incentive mechanism and CEO power on multiple directorships-firm innovation relationship. Chen, Ho, Kueh, and Lee (2002) assert that the changes, resulting from new product introduction (NPI) announcements, of a firm’s market value have direct and efficient effects upon its innovative abilities. Hence, this study takes NPI announcements as the proxy of innovation.
The samples of this study are from NPI announcements of America public firms during 2000-2011.The empirical results show that multiple directorships do have positive and significant effects upon the market reaction to firms’ NPI announcements. Moreover, incentive mechanism moderates the relationship between multiple directorships and firm's NPI announcements. According to the findings, outside director who holds multiple directorships and fulfills their responsibility will accumulate their own resources and reputation and it benefits firms’ innovation in the same time.
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