#5162. The effect of CEO regulatory focus on changes to investments in R&D

August 2026publication date
Proposal available till 07-06-2025
4 total number of authors per manuscript0 $

The title of the journal is available only for the authors who have already paid for
Journal’s subject area:
Strategy and Management;
Management of Technology and Innovation;
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Abstract:
Research and development (R&D) is a key contributor to organizations’ pursuit of innovation. In turn, CEOs can influence important decisions related to changes in R&D spending—the kind of spending with the potential to lead to innovation. We seek to understand the motivation and conditions under which CEOs may influence R&D spending changes. We use a panel dataset of 688 S&P 1500 firms to test our hypotheses. Our findings suggest a negative relationship between CEO prevention focus and R&D increase, while CEO promotion focus produces no meaningful effect. We further test CEO compensation as a moderating mechanism, testing both incentive and fixed CEO compensation. We find that incentive compensation negatively moderates the relationship between CEO promotion focus and R&D increase, and positively moderates the relationship between CEO prevention focus and R&D increase. Based on these results we discuss theoretical implications of our findings, including differing effects of CEO regulatory focus on firm risk-taking behavior and how compensation packages may alter those effects.
Keywords:
CEO compensation; CEO motivation; R&D; regulatory focus theory

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