Rookie directors and corporate innovation: evidence from Chinese listed firms

Using a sample of Chinese listed A-share firms from 2006 to 2017, we find that firms with more rookie independent directors have less corporate innovation. The result is more pronounced in private firms and firms located in lower intellectual property right protection provinces. We argue that firms with more rookie independent directors have lower corporate governance and tend to hold more cash, thus reducing corporate innovation activities. Our results have important implications from the practice, academic, and public policy perspectives.