How Chief Information Officer Drives Innovation?

Owing to today’s global digital economy, information technology (IT) executives, namely Chief Information Officers (CIOs), play a crucial role in bridging the business and IT by exploiting IT as a strategic differentiator. Equipped with technical background, CIOs are well-positioned to help the firm to gather and utilize information to explore and exploit innovation. The study aims to investigate whether CIOs contributes to a firm’s innovative search. We examine the long-term effects of CIO appointment on the return on innovation investment through research and development (R&D) activities. By employing patent data and a matched sample of U.S. firms between 1995 and 2010, we show that CIO appointment is positively associated with future innovation efficiency. In particular, we find that CIOs in IT firms exerts a stronger influence on the pursuit of innovation. Taken together, our results shed light on the strategic role of CIO in cultivating firm’s innovation capability