The bright side of belief dispersion within TMTs

Abstract

Prior research shows that firm innovation policies can be affected by the perceptional lens of their top executives. However, existing literature has exclusively focused on CEOs and ignored the interactional effect among CEO and non-CEO executives. In this study, I examine the effect of having different opinions within a firm’s TMT and find that belief dispersion within the TMT is positively related to corporate innovative efficiency. This result still holds after considering potential endogeneity in the baseline regressions. Next, I use three subsample analyses to indicate that information sharing and bias reduction are potentially the channels of the positive effect of belief dispersion. The last section of this thesis provides evidence that illustrates a positive relationship between TMTs belief dispersion and firm performance, yielding further corporate implications.