Disruptive innovation dramatically changes the demand of a product market in the information technology (IT) industry. In response to the impact of disruptive innovation, IT firms that may be eliminated from the competitive race actively develop innovative products and adjust their operating strategies to strengthen their survivability in the fiercely competitive market. Thus, this study explores the factors that affect firm value in the IT industry under the impact of disruptive innovation. The empirical results reveal that knowledge capital and CEO power play crucial roles in explaining firm value. IT firms with powerful CEOs and increased knowledge capital have high firm values. The effects of knowledge capital and CEO power on firm value are especially significant for founder and duality CEO firms. Furthermore, the influence of CEO power is more prominent in periods of financial crisis.
Relation:
The North American Journal of Economics and Finance 55, p.1-13
