Can MZ CEOs Become the Winning Pitchers of Innovative Companies? : Examining the Influence of MZ CEOs in Prospector Strategy Companies

[Purpose] This study aims to explore whether Millennial and Generation Z (MZ) CEOs can be pivotal in driving the growth of innovative companies, especially amid the trending issue of their appointments as top executives in major firms. It investigates whether there is a difference in firm value between companies managed by MZ CEOs versus those that are not, with a particular focus on comparing defensive companies that prioritize cost minimization for short-term results against innovative companies that emphasize long-term performance through innovation. [Methodology] The study employs a dataset of Korean listed companies on the KOSPI and KOSDAQ from 2013 to 2022, following the adoption of the IFRS. I conduct panel data analysis to examine the impact of MZ leaders on corporate value and the moderating effects of business strategy. [Findings] The findings reveal no significant direct correlation between MZ CEOs and firm value. However, a moderating effect of business strategy is observed in the relationship, indicating that the positive impact of MZ CEOs on financial performance is significant only in innovative companies. Additionally, when assessing the aspects of research and development, efficiency, growth potential, marketing, organizational stability, and capital intensity, four areas-research and development, efficiency, growth potential, and capital intensity-show a clear positive impact of MZ CEOs on firm value. [Implications] This research extends the scope of accounting studies related to the determinants of corporate financial performance, characteristics of executives, and strategy by empirically examining the generational issues of executives, firm value, and business strategy. Practically, it validates the management capabilities of MZ CEOs at the forefront of generational changes in executive teams, suggesting suitable executive characteristics for innovative companies aimed at sustainable future growth.