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Driver, Ciaran and Guedes, Maria João Coelho (2017) 'R and D and CEO departure date: do financial incentives make CEO’s more opportunistic?' Industrial and Corporate Change, 26 (5). pp. 801-820.

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The purpose of this article is to examine whether Research and Development (R&D) expenditure is biased downward because of self-serving behavior of highly incentivized managers. This offers an insight into the general relationship between incentives and opportunism. Using instrumental variables and panel-data methods for a sample of high R&D spenders in the UK, we examine whether R&D is reduced in cases of imminent departure of the CEO. Results show evidence for this but only for the sample above the median in intensity of stock and options in the compensation package. This suggests that opportunism is enhanced by inappropriately strong incentives. The main results are robust to the inclusion of a number of corporate governance variables. JEL classification: G30, O30

Item Type: Journal Article
SOAS Departments & Centres: Departments and Subunits > School of Finance & Management
Legacy Departments > Faculty of Law and Social Sciences > School of Finance and Management
ISSN: 09606491
Copyright Statement: © The Author 2017. Published by Oxford University Press on behalf of Associazione ICC. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (, which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
DOI (Digital Object Identifier):
Date Deposited: 03 Feb 2017 14:13

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