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R&D investments in family and founder firms: An agency perspective

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  • Block, Joern H.

Abstract

Investments in R&D can influence a firm's ability to develop new products and to create and adopt innovative technologies that may enhance productivity. However, due to uncertainty regarding the outcome, investments in R&D may lead to an agency problem between the owners and the managers of a firm. Family and founder firms are often considered to be different in their agency situation than other firms, which may have an influence on R&D investments. This paper analyzes R&D spending in family and founder firms versus other firms. The results show that while family ownership decreases the level of R&D intensity, ownership by lone founders has a positive effect not only on R&D intensity but also on the level of R&D productivity. The paper contributes to the understanding of the role of entrepreneurship in making high risk/high return R&D decisions.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Business Venturing.

Volume (Year): 27 (2012)
Issue (Month): 2 ()
Pages: 248-265

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Handle: RePEc:eee:jbvent:v:27:y:2012:i:2:p:248-265

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Web page: http://www.elsevier.com/locate/jbusvent

Related research

Keywords: Lone founder firms; Family firms; R&D spending; R&D productivity; Entrepreneurial orientation; Agency theory; Monitoring;

References

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Cited by:
  1. Block, Joern & Spiegel, Frank, 2011. "Family Firms and Regional Innovation Activity: Evidence from the German Mittelstand," MPRA Paper 28604, University Library of Munich, Germany.
  2. Werner, Arndt & Schröder, Christian & Mohr, Benjamin, 2013. "Innovationstätigkeit von Familienunternehmen," IfM-Materialien 225, Institut für Mittelstandsforschung (IfM) Bonn.

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