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Management Control and Innovative Activity

  • Dirk Czarnitzki

    ()

  • Kornelius Kraft

This paper discusses theoretically the different incentives of managers versus firm owners to invest in innovative activities. There are opposing effects concerning R & D intensity in the manager-controlled firm. Our study on the determinants of R & D intensity presentsempirical results concerning this question. A sample of German firms with 4,126 observations is used to estimate Tobit and semiparametric censored least absolute deviation (CLAD) models. It turns out that the owner-led firms invest less into R & D than the managerial firms. With respect to the manager-led firms, we have mixed results concerning the question whether expenditures on R & D depend on the control exerted.

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Article provided by Springer in its journal Review of Industrial Organization.

Volume (Year): 24 (2004)
Issue (Month): 1 (02)
Pages: 1-24

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Handle: RePEc:kap:revind:v:24:y:2004:i:1:p:1-24
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100336

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  1. Schmidt, Klaus M., 1996. "Managerial Incentives and Product Market Competition," CEPR Discussion Papers 1382, C.E.P.R. Discussion Papers.
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  14. Kraft, Kornelius & Niederprum, Antonia, 1999. "Determinants of management compensation with risk-averse agents and dispersed ownership of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 40(1), pages 17-27, September.
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  19. Kaplan, Steven N, 1994. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the United States," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 510-46, June.
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