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Corporate governance and innovation: does firm age matter?

Author

Listed:
  • Stefano Bianchini
  • Jackie Krafft
  • Francesco Quatraro
  • Jacques-Laurent Ravix

Abstract

This article investigates the relationship between corporate governance (CG) and innovation for firms of different ages. We blend data drawn from the ISS RiskMetrics and the Bureau van Dijk Orbis databases to perform micro-econometric analyses on a sample of 2200 listed firms. We show that CG may decrease research and development for all firms and that, more importantly, it has a significant and negative effect on the patenting strategy of the younger firms. Our results are consistent with the CG life cycle view, according to which young companies tend to privilege short-termism and value preservation rather than long-term risky innovation strategies. What shown and discussed in this contribution supports the proposition that firm age matters in how CG may alter innovation.

Suggested Citation

  • Stefano Bianchini & Jackie Krafft & Francesco Quatraro & Jacques-Laurent Ravix, 2018. "Corporate governance and innovation: does firm age matter?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(2), pages 349-370.
    • Handle: RePEc:oup:indcch:v:27:y:2018:i:2:p:349-370.
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    File URL: http://hdl.handle.net/10.1093/icc/dtx031
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    Cited by:

    1. Hassan Arouri & Adel Ben Youssef & Francesco Quatraro & Marco Vivarelli, 2020. "Drivers of growth in Tunisia: young firms vs incumbents," Small Business Economics, Springer, vol. 54(1), pages 323-340, January.
    2. Cong Zhang & Shanyue Jin, 2022. "What Drives Sustainable Development of Enterprises? Focusing on ESG Management and Green Technology Innovation," Sustainability, MDPI, vol. 14(18), pages 1-20, September.
    3. Yexin Liu & Weiwei Wu & Ruixiang Han, 2021. "Technology-Independent Directors and Innovative Knowledge Assets: A Contingency Perspective," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    4. Francesco Aiello & Lidia Mannarino & Valeria Pupo, 2023. "Family Firm Heterogeneity And Patenting. Revising The Role Of Size And Age," Working Papers 202301, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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