Is there a relationship between a CEO's retirement and the R&D expenses in a firm?
Is there a relationship between a CEO's retirement and the R&D expenses in a firm?
Homework Answers
There is a relationship between a CEO's retirement and R&D expenses in firm. When a CEO time to retire comes close he/she becomes growing aversion to risk and this forces him/ her to invest on short term strategies. So the R&D expence in a firm decrease. Investment in R&D gives return in long run form which the company get the benefit. If the CEO thinks about the development of the company then it will not affect the R&D expenses but if the CEO thinks about his/ her own benifit then he/ she will not encourage the R&D expenses. So the relation can be go in both way which depends on the individual.
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