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The effects of owner identity and external governance systems on R&D investments: A study of Western European firms

  • Munari, Federico
  • Oriani, Raffaele
  • Sobrero, Maurizio

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.

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Article provided by Elsevier in its journal Research Policy.

Volume (Year): 39 (2010)
Issue (Month): 8 (October)
Pages: 1093-1104

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Handle: RePEc:eee:respol:v:39:y:2010:i:8:p:1093-1104
Contact details of provider: Web page: http://www.elsevier.com/locate/respol

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