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.
Authors
- Fajar Kristanto Gautama Putra (ORCID: https://orcid.org/0000-0003-1213-0593)
- John Nowland (ORCID: https://orcid.org/0000-0002-2857-9603)
- Nabilah Az-zahra Zhafira
- Mohammad Nasih
- Iman Harymawan
Institutions
- Universitas Airlangga (ID)
- Illinois State University (US)
- Chicago State University (US)
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