Document Type

Master's Culminating Experience

Publication Date



This study analyzes the influence exerted by CEO characteristics (specifically, CEO stockholding percentages and CEO age) on research and development (R&D) expenditures in large American corporations over the twenty year period from 1986 to 2005. Using the Herfindahl-Hirschman Index (HHI) to measure market share concentrations, and making specific reference to two Schumpeterian hypotheses on the correlation between R&D and increases in firm size, this study establishes a positive linear relationship between the dependent variable, R&D expenditure, and the independent variables of CEO stockholding, CEO age, firm size, and market share. This study next describes the corporate and market conditions which promote the development of a positive linear relationship between CEO characteristics and R&D and concludes by identifying the point of high market concentration at which the prominence of R&D activity is superseded by expenditures for advertising.