Militaristic management and investment decision: an analysis of risk preference

Purpose This study investigates the impact of military-experienced board members on firm-level investment efficiency, focusing on Indonesian non-financial listed companies from 2011 to 2019. It integrates upper echelons and imprinting theories to explain how military backgrounds shape corporate decision-making, particularly in relation to risk preferences. Design/methodology/approach Based on 2,648 firm-year observations, this study employs fixed-effects regression to analyze the relationship between military experience and investment efficiency. To address endogeneity and ensure robustness, we apply Heckman's two-stage regression, coarsened exact matching (CEM), propensity score matching (PSM) and the generalized method of moments (GMM). Findings The results reveal a significantly positive association between military-experienced boards and investment efficiency. This effect is particularly pronounced in underinvesting firms, in firms operating in low-concentration industries, and where board commissioners have military backgrounds. The positive association is also evident in the context of R&D efficiency. Originality/value These findings suggest that appointing board commissioners with military backgrounds can enhance disciplined and context-sensitive investment decisions. However, military discipline alone may not substitute for financial expertise, underscoring the need for a balanced board composition.

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Publication Details

Journal
Journal of Accounting Literature
Published
2026-03-27
DOI
https://doi.org/10.1108/jal-11-2024-0333
Primary Topic
Corporate Finance and Governance
Type
article
Field-Weighted Citation Impact
0.00
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article

Militaristic management and investment decision: an analysis of risk preference

Fajar Kristanto Gautama Putra, John Nowland, Nabilah Az-zahra Zhafira, Mohammad Nasih et al.
Journal of Accounting Literature
Corporate Finance and Governance
article

Militaristic management and investment decision: an analysis of risk preference

Fajar Kristanto Gautama Putra, John Nowland, Nabilah Az-zahra Zhafira, Mohammad Nasih, Iman Harymawan
article en

Abstract

Purpose This study investigates the impact of military-experienced board members on firm-level investment efficiency, focusing on Indonesian non-financial listed companies from 2011 to 2019. It integrates upper echelons and imprinting theories to explain how military backgrounds shape corporate decision-making, particularly in relation to risk preferences. Design/methodology/approach Based on 2,648 firm-year observations, this study employs fixed-effects regression to analyze the relationship between military experience and investment efficiency. To address endogeneity and ensure robustness, we apply Heckman's two-stage regression, coarsened exact matching (CEM), propensity score matching (PSM) and the generalized method of moments (GMM). Findings The results reveal a significantly positive association between military-experienced boards and investment efficiency. This effect is particularly pronounced in underinvesting firms, in firms operating in low-concentration industries, and where board commissioners have military backgrounds. The positive association is also evident in the context of R&D efficiency. Originality/value These findings suggest that appointing board commissioners with military backgrounds can enhance disciplined and context-sensitive investment decisions. However, military discipline alone may not substitute for financial expertise, underscoring the need for a balanced board composition.

Journal of Accounting Literature
Universitas Airlangga (ID), Illinois State University (US), Chicago State University (US)
Openalex Percentile: Top 7%
Corporate Finance and Governance
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Militaristic management and investment decision: an analysis of risk preference — Fajar Kristanto Gautama Putra, John Nowland, et al. · Journal of Accounting Literature (2026) | TGRS Research Map | TGRS