Title

Firm innovative knowledge assets and economic performance: The asymmetric roles of incentive- and monitoring-based governance mechanisms

Publication Type

Journal Article

Publication Date

2009

Abstract

We posit that a firm's resource configuration constitutes a critical context for various corporate governance mechanisms. Although innovative knowledge assets are generally a key determinant of a firm's economic performance, they also lead to greater information asymmetry among managers and owners and to the need to grant managers more discretion in making resource deployment decisions. This weakens the role of monitoring but increases the effectiveness of incentive mechanisms. Therefore, we hypothesize asymmetric moderating effects of monitoring- and incentive-based governance mechanisms on the relationship between innovative knowledge assets and economic performance. Our empirical analyses provide support for the key arguments.

Discipline

Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Academy of Management Journal

Volume

52

Issue

5

First Page

919

Last Page

938

ISSN

0001-4273

Identifier

10.5465/AMJ.2009.44633414

Publisher

Academy of Management