Corporate governance practices and companies' R&D orientation: evidence from European countries
AbstractThis working paper empirically investigates if corporate governance practices affect the resources firms devote to R&D. The authors Florence HonorÃ©, Federico Munari and Bruno van Pottelsberghe found that an executive remuneration system that is linked to the firm's financial performance has a particularly strong negative impact on R&D. This confirms the hypothesis that incentive mechanisms lead managers to focus on more predictable and easily measurable short-term activities,ultimately hampering the commitment to innovative projects.
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Bibliographic InfoPaper provided by Bruegel in its series Working Papers with number 492.
Date of creation: Jan 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-14 (All new papers)
- NEP-INO-2011-05-14 (Innovation)
- NEP-PPM-2011-05-14 (Project, Program & Portfolio Management)
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