R&D Intensity and Economic Recession Investigating the Moderating Role of CEO Characteristics

The authors employ the upper echelons theory and contingency theory in understanding the moderating effect of the chief executive officer (CEO) characteristics on the relationship between recession and research and development (R&D) intensity. The authors selected 2004 (nonrecession) and 2008 (recession) years for the analysis. Evidence was found that during recession, indeed, organizations decreased their R&D spending. The findings supported that CEOs with a shorter career horizon decreased R&D spending more dramatically than CEOs with a longer career horizon during recession. No evidence was found for the moderating effects of CEO tenure and insider status.