R&D investment and firms´ financial performance: The moderating role of chairman-CEO duality

Though technological innovation by R&D is at the core of business strategy for firms to compete in the competitive market, but the previous studies did not lead to a consensus about the R&D impacts on financial performance. The study suggests that the separation of Board´s chairman and CEO may play an important moderating role in firm´s R&D investment decision-making. After testing the correlation between firms R&D investment intensity and the one-year lagged financial performance, the moderating effect of chairman-CEO duality is studied, and the results suggest that duality does mediate the effect of R&D investment on firm´s financial performance. But further analyses of subsample suggest that it is the fact only in the low-tech firms.