The Moderating Effects of CEO Career Horizon on the Relationship between Performance Feedback and R&D Intensity

Drawing on an integrative framework that combines the behavioral theory of the firm (BTOF) and upper echelons theory, this study examines how CEO career horizon conditions the relationship between performance feedback and R&D intensity. While firms adjust search and resource allocation depending on whether performance falls below or exceeds aspiration levels, such responses may vary according to the temporal constraints associated with the CEO’s career horizon. We argue that the moderating effect of CEO career horizon varies across performance conditions and test this hypothesis using a panel of U.S. publicly listed manufacturing firms from 1992 to 2019. Firm fixed-effects models indicate that under negative performance feedback, the interaction between performance feedback and CEO career horizon is not statistically significant. In contrast, under positive performance feedback, CEOs with shorter career horizons reduce R&D intensity more substantially than those with longer horizons. Furthermore, the difference in moderating effects across performance conditions is statistically significant, suggesting that the influence of CEO career horizon operates asymmetrically across performance contexts. These findings imply that the level of managerial discretion available to the CEO varies across performance conditions, and that personal attributes such as career horizon are more directly reflected in strategic resource allocation when discretion is relatively greater. By linking performance feedback theory with upper echelons theory, this study clarifies the contextual and asymmetric role of CEO career horizon in shaping strategic investment decisions.