Ownership Structure and R&D Investment of Japanese Start-up Firms
AbstractIn this paper, we analyze the influence of ownership structure on the research and development (R&D) investment of start-up firms. Previous studies on the relationship between ownership and R&D have concentrated on the large, established firms listed on the stock market and have focused on the concentration of ownership, regardless of the types of large shareholders. We argue that the type of large shareholders is an important factor in promoting R&D investment under asymmetric information and that R&D projects, particularly those of start-up firms, strongly depend on the financing received from venture capital firms and main banks. Using a unique data set of the Japanese start-up firms in the 1990s, we found that, even after controlling for the innovativeness prior to the venture capital firm or main bank relationship, the shareholding by venture capital firms and main banks have, in fact, positive and significant effects on the R&D investment of start-up firms.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2006-1.
Length: 25 p.
Date of creation: Jun 2006
Date of revision:
R&D; Ownership Structure; Start-up Firms; Venture Capital; Main Bank;
Find related papers by JEL classification:
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
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- Fabrizi, Simona & Lippert, Steffen & Norback, Pehr-Johan & Persson, Lars, 2007.
"Venture Capitalists, Asymmetric Information and Ownership in the Innovation Process,"
6265, University Library of Munich, Germany.
- Fabrizi, Simona & Lippert, Steffen & Norbäck, Peh & Persson, Lars, 2008. "Venture Capitalists, Asymmetric Information, and Ownership in the Innovation Process," Working Paper Series 776, Research Institute of Industrial Economics.
- Fabrizi, Simona & Lippert, Steffen & Norbäck, Pehr-Johan & Persson, Lars, 2011. "Venture Capital, Patenting, and Usefulness of Innovations," CEPR Discussion Papers 8392, C.E.P.R. Discussion Papers.
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