Pre-entrepreneurship social status and research and development investment decision: Evidence from Chinese private enterprises

Abstract

Social status is seen as an important topic in management and organisational sciences. Despite the extensive research on the upper echelons of management, little is known about the influence of social status on R&D investment decisions. We examine the effects of pre-entrepreneurial social status on R&D investments based on imprinting theory, using 2000–2014 data for 20,177 Chinese private small- and medium-sized enterprises. The results reveal that entrepreneurs with an upper and lower social status show a stronger tendency to make R&D investments than middle-class counterparts. The findings are robust to various sensitivity tests. In addition, we explore the moderating influences of political capital and institutional environment, both of which enhance the positive relationship between social status and R&D investments. Our study finds that social status has a lasting and varying impact on decisions to engage in innovation behaviours. The findings contribute to research on Chinese firm innovation and offer key implications for social status and imprinting theorising.