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What determines firms’ R&D intensity in business groups with cross-ownership structures?

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  • Taeyoon Sung
  • Chang-Yang Lee
  • Hyeonmi Ahn

Abstract

This paper examines the impact of group-controlling shareholders’ interests on the R&D decision of group-affiliated firms in business groups with cross-ownership structures, especially with regard to the impact of control-ownership disparities or cash-flow rights. We show that R&D intensity across group-affiliated firms, in business groups with cross-ownership structures, is higher when control-ownership disparities are low or when group-controlling shareholders have higher cash-flow rights. Particularly in publicly listed firms, we find that the cash-flow rights of group-controlling shareholders are one of the most important determinants of the R&D intensity for group-affiliated firms.

Suggested Citation

  • Taeyoon Sung & Chang-Yang Lee & Hyeonmi Ahn, 2017. "What determines firms’ R&D intensity in business groups with cross-ownership structures?," Industry and Innovation, Taylor & Francis Journals, vol. 24(6), pages 633-658, August.
    • Handle: RePEc:taf:indinn:v:24:y:2017:i:6:p:633-658
    DOI: 10.1080/13662716.2016.1261694
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    References listed on IDEAS

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    1. John Bound & Clint Cummins & Zvi Griliches & Bronwyn H. Hall & Adam B. Jaffe, 1984. "Who Does R&D and Who Patents?," NBER Chapters, in: R&D, Patents, and Productivity, pages 21-54, National Bureau of Economic Research, Inc.
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    Cited by:

    1. BeomJu Park & Chang-Yang Lee, 2023. "Does R&D cooperation with competitors cause firms to invest in R&D more intensively? evidence from Korean manufacturing firms," The Journal of Technology Transfer, Springer, vol. 48(3), pages 1045-1076, June.
    2. Zhang, Huili & Huang, Yibo & Xu, Lei & Cui, Xuegang & Hu, Zhonghui, 2025. "University shareholding and corporate innovation: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 101(C).
    3. Asad, Muhammad & Akbar, Saeed & Li, Jing & Shah, Syed Zulfiqar Ali, 2023. "Board diversity and corporate propensity to R&D spending," International Review of Financial Analysis, Elsevier, vol. 89(C).

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