Lee Seunghye, Oh Won-Yong, Chang Young Kyun
Sogang Business School, Sogang University, Seoul 04107, Republic of Korea.
Lee Business School, University of Nevada, Las Vegas, NV 89154, USA.
Behav Sci (Basel). 2023 Mar 11;13(3):247. doi: 10.3390/bs13030247.
This study investigates the effects of discretionary slack resources on a firm's R&D investment. Specifically, we examine whether and how a CEO's psychological traits play a role in the relationship between discretionary slack and R&D investment. Using a panel sample from U.S. manufacturing firms in 2006-2010, we found that slack resources lead to an increase in R&D intensity. Furthermore, this positive effect is stronger when CEOs have a strong promotion focus and perceive an addressable negative attainment discrepancy. Thus, our findings show how (a) the level of discretionary slack and (b) CEOs' promotion focus and aspiration level jointly shape R&D investment decisions. Considering CEOs' psychological traits contributes to a more comprehensive view of the conditions under which discretionary slack resources matter for a firm's strategic decisions.
