Influence of CEO Personal Risk Preference Change on Corporate R&D Investment Decision-making

The study belongs to the field of relationship between CEO risk preferences and corporate risk decision-making. Research in this field tends to suffer from endogeneity issues. This study innovatively introduces car accidents as an absolutely exogenous event and uses insurance policy data to measure risk preference indicators, thereby addressing the endogeneity problem in research on the relationship between executive risk preferences and corporate risk decision-making. The research question of this study is: Does car accident experience of company CEO and chairman affect the cognition of the CEO and chairman, and subsequently influence the R&D investment decisions of their companies? The research method of this study is to measure the cognitive indicator of executive risk preferences through the car insurance policy purchasing data of CEOs and chairmen, and then study its impact on corporate R&D investment. The conclusion of this study is that the personal experience of car accidents by CEOs and chairmen will increase their risk aversion, and the increase in risk aversion leads to a reduction in corporate R&D investment. This study innovatively uses the car accident events of the company's CEO to identify the impact of changes in the CEO's risk attitude on corporate R&D investment. The article uses very unique insurance and car accident data, measuring risk preference indicators with policy data, and using car accidents as an absolutely exogenous event, effectively solving the indicator selection and endogeneity issues in previous research on the relationship between executive risk preferences and corporate risk decision-making.