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 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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stein, Jeremy C., 1988.
"Takeover Threats and Managerial Myopia,"
3708937, Harvard University Department of Economics.
- William Lazonick, 2007. "The US stock market and the governance of innovative enterprise ," Industrial and Corporate Change, Oxford University Press, vol. 16(6), pages 983-1035, December.
- Fama, Eugene F & Jensen, Michael C, 1983. "Agency Problems and Residual Claims," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 327-349, June.
- Mark Lehrer & Andrew Tylecote & Emmanuelle Conesa, 1999. "Corporate Governance, Innovation Systems and Industrial Performance," Industry and Innovation, Taylor & Francis Journals, vol. 6(1), pages 25-50.
- David J. TEECE, 2008.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
World Scientific Book Chapters,
in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87
World Scientific Publishing Co. Pte. Ltd..
- Teece, David J., 1986. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- David J. Teece, 2003. "Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy," World Scientific Book Chapters, in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 2, pages 11-46 World Scientific Publishing Co. Pte. Ltd..
- Tylecote, Andrew & Ramirez, Paulina, 2006. "Corporate governance and innovation: The UK compared with the US and 'insider' economies," Research Policy, Elsevier, vol. 35(1), pages 160-180, February.
- Alexander Dyck & Luigi Zingales, 2002.
"Private Benefits of Control: An International Comparison,"
NBER Working Papers
8711, National Bureau of Economic Research, Inc.
- Alexander Dyck & Luigi Zingales, 2004. "Private Benefits of Control: An International Comparison," Journal of Finance, American Finance Association, vol. 59(2), pages 537-600, 04.
- Dyck, Alexander & Zingales, Luigi, 2002. "Private Benefits of Control: An International Comparison," CEPR Discussion Papers 3177, C.E.P.R. Discussion Papers.
- repec:hrv:faseco:30728046 is not listed on IDEAS
- Lazonick, William & O'Sullivan, Mary, 1997. "Finance and industrial development. Part I: the United States and the United Kingdom," Financial History Review, Cambridge University Press, vol. 4(01), pages 7-29, April.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Booth, G. Geoffrey & Junttila, Juha & Kallunki, Juha-Pekka & Rahiala, Markku & Sahlstrom, Petri, 2006. "How does the financial environment affect the stock market valuation of R&D spending?," Journal of Financial Intermediation, Elsevier, vol. 15(2), pages 197-214, April.
- Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
- Kaoru Hosono & Masayo Tomiyama & Tsutomu Miyagawa, 2004. "Corporate governance and research and development: Evidence from Japan," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(2), pages 141-164.
- Jeremy C. Stein, 1989. "Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 655-669.
- Randall Morck & David Stangeland & Bernard Yeung, 2000.
"Inherited Wealth, Corporate Control, and Economic Growth The Canadian Disease?,"
in: Concentrated Corporate Ownership, pages 319-372
National Bureau of Economic Research, Inc.
- Randall K. Morck & David A. Stangeland & Bernard Yeung, 1998. "Inherited Wealth, Corporate Control and Economic Growth: The Canadian Disease," NBER Working Papers 6814, National Bureau of Economic Research, Inc.
- Dirk Czarnitzki & Kornelius Kraft, 2004.
"Management Control and Innovative Activity,"
Review of Industrial Organization,
Springer;The Industrial Organization Society, vol. 24(1), pages 1-24, 02.
- Coriat, Benjamin & Weinstein, Olivier, 2002. "Organizations, firms and institutions in the generation of innovation," Research Policy, Elsevier, vol. 31(2), pages 273-290, February.
- Andrei Shleifer & Robert W. Vishny, 1995.
"A Survey of Corporate Governance,"
Harvard Institute of Economic Research Working Papers
1741, Harvard - Institute of Economic Research.
- Molas-Gallart, Jordi & Tang, Puay, 2006. "Ownership matters: Intellectual Property, privatization and innovation," Research Policy, Elsevier, vol. 35(2), pages 200-212, March.
- Dirk Czarnitzki & Kornelius Kraft, 2004.
"Firm Leadership and Innovative Performance: Evidence from Seven EU Countries,"
Small Business Economics,
Springer, vol. 22(5), pages 325-332, 06.
- Kraft, Kornelius & Czarnitzki, Dirk, 2001. "Firm leadership and innovative performance: evidence from seven EU Countries," ZEW Discussion Papers 01-35, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Denis, Diane K. & McConnell, John J., 2003. "International Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 1-36, March.
- Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 1999.
"Corporate Ownership Around the World,"
Journal of Finance,
American Finance Association, vol. 54(2), pages 471-517, 04.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 1998. "Corporate Ownership Around the World," Harvard Institute of Economic Research Working Papers 1840, Harvard - Institute of Economic Research.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 1998. "Corporate Ownership Around the World," NBER Working Papers 6625, National Bureau of Economic Research, Inc.
- Bronwyn H. Hall & Raffaele Oriani, 2004.
"Does the Market Value R&D Investment by European Firms? Evidence from a Panel of Manufacturing Firms in France, Germany, and Italy,"
NBER Working Papers
10408, National Bureau of Economic Research, Inc.
- Hall, Bronwyn H. & Oriani, Raffaele, 2006. "Does the market value R&D investment by European firms? Evidence from a panel of manufacturing firms in France, Germany, and Italy," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 971-993, September.
- Michel Goyer, 2001. "Corporate Governance And The Innovation System In France 1985-2000," Industry and Innovation, Taylor & Francis Journals, vol. 8(2), pages 135-158.
- John Bound & Clint Cummins & Zvi Griliches & Bronwyn H. Hall & Adam B. Jaffe, 1982.
"Who Does R&D and Who Patents?,"
NBER Working Papers
0908, National Bureau of Economic Research, Inc.
- Munari, Federico & Roberts, Edward B. & Sobrero, Maurizio, 2002. "Privatization processes and the redefinition of corporate R&D boundaries," Research Policy, Elsevier, vol. 31(1), pages 31-53, January.
- Kenneth A. Froot & Andre F. Perold & Jeremy C. Stein, 1992.
"Shareholder Trading Practices And Corporate Investment Horizons,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 5(2), pages 42-58.
- Kenneth A. Froot & Andre F. Perold & Jeremy C. Stein, 1991. "Shareholder Trading Practices and Corporate Investment Horizons," NBER Working Papers 3638, National Bureau of Economic Research, Inc.
- Marie Carpenter & William Lazonick & Mary O'Sullivan, 2003. "The stock market and innovative capability in the New Economy: the optical networking industry," Industrial and Corporate Change, Oxford University Press, vol. 12(5), pages 963-1034, October.
- Barca, Fabrizio & Becht, Marco (ed.), 2001. "The Control of Corporate Europe," OUP Catalogue, Oxford University Press, number 9780199247424.
- O'Sullivan, Mary, 2000. "The Innovative Enterprise and Corporate Governance," Cambridge Journal of Economics, Oxford University Press, vol. 24(4), pages 393-416, July.
- repec:hrv:faseco:30747162 is not listed on IDEAS
- Chau, Gerald K. & Gray, Sidney J., 2002. "Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore," The International Journal of Accounting, Elsevier, vol. 37(2), pages 247-265.
- Miozzo, Marcela & Dewick, Paul, 2002. "Building competitive advantage: innovation and corporate governance in European construction," Research Policy, Elsevier, vol. 31(6), pages 989-1008, August.
- Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
- William S. Schulze & Michael H. Lubatkin & Richard N. Dino & Ann K. Buchholtz, 2001. "Agency Relationships in Family Firms: Theory and Evidence," Organization Science, INFORMS, vol. 12(2), pages 99-116, April.
- Blundell, Richard & Bond, Stephen & Devereux, Michael & Schiantarelli, Fabio, 1992. "Investment and Tobin's Q: Evidence from company panel data," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 233-257.
- John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116.
- Peggy M. Lee, 2005. "A comparison of ownership structures and innovations of US and Japanese firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 39-50.
- Verrecchia, Robert E., 1983. "Discretionary disclosure," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 179-194, April.
- Francis, Jennifer & Smith, Abbie, 1995. "Agency costs and innovation some empirical evidence," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 383-409, April.
- Josep A. Tribo & Pascual Berrone & Jordi Surroca, 2007. "Do the Type and Number of Blockholders Influence R&D Investments? New evidence from Spain," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 828-842, 09.
- Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:39:y:2010:i:8:p:1093-1104. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.