The effects of owner identity and external governance systems on R&D investments: A study of Western European firms

This paper builds on agency and institutional theory to extend the analysis of the effects of ownership and control on R&D investments by considering the influence of different types of ownership and of institutional corporate governance systems. Our empirical analysis is based on a unique datas...

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Bibliographic Details
Published in:Research policy 2010-10, Vol.39 (8), p.1093-1104
Main Authors: Munari, Federico, Oriani, Raffaele, Sobrero, Maurizio
Format: Article
Language:English
Subjects:
Agency
Corporate governance
Corporate governance Owner identity R&D investments Western Europe
Enterprises
Governance
Impact analysis
Institutions
Investment
Manycountries
Owner identity
Ownership
R&D
R&D investments
Research & development
Research and development
Studies
Western Europe
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Summary:This paper builds on agency and institutional theory to extend the analysis of the effects of ownership and control on R&D investments by considering the influence of different types of ownership and of institutional corporate governance systems. Our empirical analysis is based on a unique dataset of 1000 firms publicly-traded in six European countries (France, Germany, Italy, Norway, Sweden and the UK). Controlling for industry- and firm-level effects, our findings show that higher shareholding by families is negatively associated with R&D investment. Moreover, widely-held firms invest less in R&D in the United Kingdom than in Continental European countries, thus suggesting the existence of a greater pressure towards the reduction of R&D in market-based governance systems. The results are robust against possible sample selection biases due to firms’ discretional R&D disclosure.
ISSN:0048-7333
1873-7625
DOI:10.1016/j.respol.2010.05.004