How does the regulatory focus of CEOs spur firms’ innovation? Moderating roles of CEO tenure, gender diversity and industry munificence

Grounded on regulatory focus theory, this study aims to explore whether the regulatory focus of leadership (promotion versus prevention) influences a firm’s innovation. Moreover, it examines the moderating effect of industry munificence, gender diversity and chief executive officer (CEO) tenure.

Using random effects and the generalized method of moments (GMM), this relationship was examined using firms listed in the S&P 500 index in the period 2015–2020.

The evidence suggests that CEOs with a promotion focus significantly impact firms’ innovation, with the relationship being moderated by CEO tenure, gender diversity and industry munificence. However, CEO prevention focus does not determine strategic choices in relation to innovation. The study offers insights into corporate governance and corporate management that address stakeholders’ growing demands to innovate and appoint experienced CEOs with a promotion focus so as to ensure firm growth, particularly under the circumstances of strong market competition.

The study enhances the comprehension of the relevance of CEO regulatory focus and innovation while considering the effect of CEO tenure, gender diversity and industry munificence.