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The impact of corporate governance practices on R&D intensities of firms: An econometric study on French largest companies

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Author Info
Stéphane Lhuillery () (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)

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Abstract

Structure of corporate governance is more emphasized than governance practices when the impact on R&D intensity is studied. Our econometric contribution uses a set of ratings given by experts and focuses on corporate governance practices with a selected sample of 6623 firms belonging to 110 large French groups. We find that firms with governance practices that are shaped in order to defend shareholders’ rights are more R&D intensive. The effect is found non linear and restricted to firms near to headquarters. The best governance practices are here hardly identified. A significant difference in R&D intensity is found between French group listed only in France and French groups listed in New-York or London. The last result suggests that the impact of national systems of corporate governance on R&D and innovation may be strong. A significant sample selection is also found.

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Publisher Info
Paper provided by Ecole Polytechnique Fédérale de Lausanne, Chaire en Economie et Management de l'Innovation in its series CEMI Working Papers with number cemi-report-2006-006.

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Length: 25 pages
Date of creation: Jan 2006
Date of revision: Mar 2006
Handle: RePEc:cmi:wpaper:cemi-report-2006-006

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Related research
Keywords: Corporate governance R&D innovation provisions

Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Investment Policy
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure

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References listed on IDEAS
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