Risk culture in corporate innovation

In this study, we utilize stock market beta to examine the impact of corporate risk culture on innovation within U.S. firms. Our results reveal that firms with a pronounced high-risk culture invest more in innovation and generate greater innovation outcomes. These firms tend to employ overconfident or generalist managers and offer them incentive compensation to spur innovation. Further analysis underscores that the influence of risk culture on innovation occurs predominantly in innovative industries. Our findings highlight that firms with a high-risk culture excel in seizing innovative growth opportunities.