No 2006/7 Board control and corporate innovation

an empirical study of small technology-based firms

Abstract

This paper follows a behavioural perspective on boards and governance in exploring the influence of board control on corporate innovation in small technology-based firms. An analysis of 135 Swedish technology-based firms suggests that board involvement in decision control may influence corporate innovation. The empirical results show that board involvement in strategic decision control is positively associated with process innovation, while board involvement in financial decision control is positively associated with organizational innovation. No association is found between board involvement in decision control and product innovation. Overall, the findings suggest that board involvement in decision control may promote corporate innovation but that different kinds of decision control influence different forms of innovation.