Why top-manager origin matters for innovation strategies

It is widely accepted nowadays that certain top-manager characteristics have great influence on corporate investment strategies and a firm´s innovativeness. The present paper focuses on how top-manager origin is related to innovative firm activity. More specifically we discuss whether managers hired from outside the firm are associated with higher or lower innovative firm performance compared to internally promoted top-managers. Internally promoted managers can rely more easily on informal long term agreements and have more firm-specific knowledge whereas their externally hired colleagues have the advantage of broader outside experiences.