Managerial myopia and corporate innovation strategy

We investigate the consequences of managerial myopia on both the quantity of innovation input and the quality of innovation outputs in China. Managerial myopia not only leads to a reduction in R&D investment but also results in a deterioration in the outputs, captured by the decrease in those substantive innovations and the degradation of patents' knowledge breadth. Encouragingly, effective corporate governance mechanisms tend to mitigate the adverse effects of managerial myopia on innovation, but external pressures from stock market and product market may prompt myopic management to hastily engage in R&D efforts, but with further deterioration in innovation quality.