Purpose: The study aims to examine the military-connected firms' risk preference, specifically in the innovation intensity level context. The authors argue that firms with military-experienced top management have conservative and risk-averse behavior, influencing the innovation investment policy. Design/methodology/approach: The authors use nonfinancial Indonesian-listed firms from 2010 to 2018 amounted to 2,504 firm-year observations. Findings: The authors document a negative relationship between military connection with both innovation activities and outputs. The additional analysis documents that risk-preferences of military-connected firms will be drastically changed when the industry has a high digital level, which confirms that risk-averse military-experienced management is less dominant with adaptation skill. The authors also identify that veterans did not need a long tenure to influence firms' innovation investment policy. Lastly, the result is robust due to various endogeneity tests employed. Originality/value: This study further examines military-connected firms' technological innovation compared to prior studies and enriches the related literature.

Original languageEnglish
Pages (from-to)365-397
Number of pages33
JournalInternational Journal of Managerial Finance
Issue number2
Publication statusPublished - 8 Mar 2022


  • Innovation intensity
  • Intangibles
  • Military connection
  • Research and development


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