Founder CEO, CEO Characteristics, and Firm Innovation Efficiency: An Empirical Study of China’s GEM-Listed Companies

Round 1

Reviewer 1 Report

Dear Authors,
Thank you for providing me with the opportunity to read your paper.
I have found it very interesting, but at the same time, somewhat not completely suitable for the publication. To improve the quality of the paper, I have a couple of suggestions. I hope you will find them helpful:

First of all, there is a need for copyediting in order to improve the overall readability of the paper. As the readability affects the content and its credibility, this needs to be fixed with care.  Otherwise, arguments remain as less convincing. For example; in the first paragraph, the following sentence makes the remaining arguments less interesting. 

In many startup companies, the founder often serving as the CEO. 

Although it is obvious what is meant by this sentence, it is an incomplete one. Please improve this aspect of the paper. And, instead of founder CEO, I would use the term founding CEO.

Another key issue is that you have separated the sections of 'Theoretical Background' and 'Literature Review and Hypothesis Development'; but it would be more relevant to integrate the theoretical perspectives into the Literature Review and Hypothesis Development section. Even though this is not an absolute must, I believe that it would increase the flow and coherence of the hypotheses developed. In its current form, the theories hang in there separately without any meaningful connections. 

One interesting question to tackle is the following: when firms grow older, their innovative initiatives can become more strategic. In these situations, R&D investments' time span can also grow, so the output can be observed in the long run. And, the older the firm gets, the more likely that the founder CEO is to be replaced. Do you believe that this could affect your results? Or, could this be a limitation in your study?  

There are also some methods-related improvements needed in your paper, especially in regards to presenting them. 

In Table 2, you provided the descriptive statistics, but please report the nominal variables (gender, education) explicitly, so that the readers can have an idea about distributions. The mean of education 3.4 does not give any meaningful information. Please apply the same logic for all categorical variables you measured. And, instead of using the label 'Female', please use 'Gender'. 

Without the significance levels, the correlation matrix is incomplete. Please provide the significance in all cross-correlations. 

I hope you find my recommendations valuable. 
Wishing you good luck with your study.

Author Response

1. There is a need for copy editing in order to improve the overall readability of the paper. As the readability affects the content and its credibility, this needs to be fixed with care.

Response: We have carefully copyedited the manuscript to improve the overall readability of the paper.

 

2. And, instead of founder CEO, I would use the term founding CEO.

Response: In this paper, we use the term “founder CEO” instead of “founding CEO” by following the tradition in the literature. There are a large number of articles related to founder CEO. “Founder CEO” is the widely acceptable terminology, and “founding CEO” is rarely used. Please see the following four articles on founder CEOs. 

Lee, J. M., Yoon, D., & Boivie, S. (2020). Founder CEO Succession: The Role of CEO Organizational Identification. Academy of Management Journal, 63(1), 224-245.

Duran, P., Kammerlander, N., Van Essen, M., & Zellweger, T. (2016). Doing more with less: Innovation input and output in family firms. Academy of Management Journal, 59(4), 1224-1264.

Lee, J. M., Kim, J., & Bae, J. (2020). Founder CEOs and innovation: Evidence from CEO sudden deaths in public firms. Research Policy, 49(1), 103862-103876.

Zheng, H.; Piao, X.; Park, S. The Role of Founder-CEO, Human Capital and Legitimacy in Venture Capital Financing in China’s P2P Lending Industry. Sustainability 2021, 13, 1625.

 

3. You have separated the sections of 'Theoretical Background' and 'Literature Review and Hypothesis Development'; but it would be more relevant to integrate the theoretical perspectives into the Literature Review and Hypothesis Development section. Even though this is not an absolute must, I believe that it would increase the flow and coherence of the hypotheses developed. In its current form, the theories hang in there separately without any meaningful connections.

Response: Thanks for your suggestion. After careful deliberation, we decided to keep the 'Theoretical Background' and "Literature Review and Hypothesis Development" as two separate sections. This is a common practice in top management journals (e.g., Black 2012; Duran et al. 2016). Recent articles on Sustainability have also separated these sections (e.g., Zheng et al. 2021). We hope you understand. That said, we tried our best to improve the flow by shortening the “Theoretical Background” section and moved most content to the “Literature Review and Hypothesis Development” section. We only kept the Stewardship Theory, Risk-taking Theory and Upper Echelons Theory in the theory section because they provide an overarching theoretical framework for the whole paper.

 

Block, J. H. (2012). R&D investments in family and founder firms: An agency perspective. Journal of business venturing, 27(2), 248-265.

Duran, P., Kammerlander, N., Van Essen, M., & Zellweger, T. (2016). Doing more with less: Innovation input and output in family firms. Academy of Management Journal, 59(4), 1224-1264.

Zheng, H., Piao, X., & Park, S. (2021). The Role of Founder-CEO, Human Capital and Legitimacy in Venture Capital Financing in China’s P2P Lending Industry. Sustainability, 13(4), 1625-1639.

 

4. When firms grow older, their innovative initiatives can become more strategic. In these situations, R&D investments' time span can also grow, so the output can be observed in the long run. And, the older the firm gets, the more likely that the founder CEO is to be replaced. 

Response: Thanks for your insightful comment. We agree that this is a limitation in our research, and we added it to Section 6.3 Limitations and Future Research. In addition, we tried to reduce this confounding effect by including firm age as a control variable in our analysis. The results haven’t shown consistent impact of age on either innovation input or output.

 

5. There are also some methods-related improvements needed in your paper, especially in regards to presenting them.

Response: As you suggested, we have modified formats in Section 4 to improve the presentation.

 

6. In Table 2, you provided the descriptive statistics, but please report the nominal variables (gender, education) explicitly, so that the readers can have an idea about distributions. The mean of education 3.4 does not give any meaningful information. Please apply the same logic for all categorical variables you measured.

 Response: In Section 4.3.3 and Table 1, we report the definition of each nominal variable (female, education). In section 5.1, we provide descriptive statistics. In the analysis of descriptive statistics, we make a supplementary analysis of the distribution of each nominal variable, so that the readers can have an idea about their distributions.

 

7. Instead of using the label 'Female', please use 'Gender'.

 Response: In the paper, the label "Female" is replaced by "Gender".

 

8. Without the significance levels, the correlation matrix is incomplete. Please provide the significance in all cross-correlations.

 Response: We significance levels to the correlation matrix (Table 3).

Thank you for your helpful comments and suggestions.

Reviewer 2 Report

Thanks for providing the opportunity to review this paper. Your writing is very clear. However, I have some comments for you to improve the quality of this paper.

 

First, in abstract, you said “much remain unknown regarding how founder CEOs influence the efficiency of firm innovation and how this influence differs based on founder CEO’s characteristics.” As far as I know, this research field has been paid attention by many management scholars. Therefore, you need to clearly explain why this study is important and how it will advance our knowledge in introduction.

Second, in theoretical background, you used entrepreneurship theory, stewardship theory, social feminist theory, risk-taking theory and upper echelons theory. I suggest you do not integrate multiple theories to explain the relationship and the moderating effect. Normally, business research uses one or two theories in a single study.

Third, the independent variable is not clear. You need to give us a clear definition of the variables and make the hypotheses easy to understand. For instance, what’s the meaning of the relationship between founder CEO and innovation input? Is founder CEO an independent variable?

Finally, an empirical paper normally has four major parts. The discussion section is as important as introduction and other parts. Therefore, I suggest you to enhance the discussion. The future research directions are as important as the theoretical contributions.

Thanks again and have a good luck.

 

Author Response

1. In abstract, you said “much remain unknown regarding how founder CEOs influence the efficiency of firm innovation and how this influence differs based on founder CEO’s characteristics.” As far as I know, this research field has been paid attention by many management scholars. Therefore, you need to clearly explain why this study is important and how it will advance our knowledge in introduction.

Response: In the abstract, we revised the explanation of why this research is important.

2. In theoretical background, you used entrepreneurship theory, stewardship theory, social feminist theory, risk-taking theory and upper echelons theory. I suggest you do not integrate multiple theories to explain the relationship and the moderating effect. Normally, business research uses one or two theories in a single study.

Response: In the section 2, we deleted Entrepreneurship Theory and Social Feminism Theory. We kept Stewardship Theory, Risk-taking Theory and Upper Echelons Theory because they provide an overarching theoretical framework for the whole paper. Theories can be integrated with each other, and it’s generally desirable to do so. In many cases, the combination of different theories can be used to explain new problems that a single theory is not able to explain. As Okhuysen and Bonardi (2001) suggest, “management research uses combinations of ideas or blends of theories to advance new insights and develop novel hypotheses that can ultimately be tested empirically” (p. 6). Thanks for your understanding.

Okhuysen, G., & Bonardi, J.-P. 2011. The Challenges of Building Theory by Combining Lenses. Academy of Management Review, 36(1): 6-11.

 

3. The independent variable is not clear. You need to give us a clear definition of the variables and make the hypotheses easy to understand. For instance, what’s the meaning of the relationship between founder CEO and innovation input? Is founder CEO an independent variable?

Response: You are right. Founder CEO(FCEO) is an independent variable. In Introduction, we provided a formal definition of founder CEO. “A founder CEO refers to an individual who founds a company and also holds the CEO position of the company.” Hypotheses H1a and H1b have been modified to clarify what the relationship means. The measurement of independent variables is explained in detail in Section 4.3.2 and Table 1.

 

4. The discussion section is as important as introduction and other parts. Therefore, I suggest you to enhance the discussion. The future research directions are as important as the theoretical contributions.

Response: In section 6.3, we revised the limitations and future research directions.

 

Thank you for your helpful comments and suggestions.

Round 2

Reviewer 1 Report

Thank you for making the effort to improve the manuscript. All my concerns were sufficiently addressed in the revised version. 

Reviewer 2 Report

No more other comments.