When does a CEO’s risk propensity drive firm exploration in product development?

Findings from our analysis of publicly-traded U.S. software firms show that

• when a CEO is risk-prone, competitive pressure creates a sense of urgency that reinforces the association between the CEO’s risk propensity and exploration.

• when the CEO’s power is limited and the firm has already reached an excessive level of exploration, a CEO who is more risk-prone cannot prompt the firm to develop many new products.

We advance research on the managerial antecedents of exploration and offer a dynamic perspective that relates the heterogeneity in firms’ exploration tendencies to the behavioral inclinations of their CEOs.

Link to the  paper: https://pubsonline.informs.org/doi/10.1287/stsc.2022.0160