The role of ownership as R&D incentive in business groups
Several empirical papers have shown that firms belonging to business groups have a higher propensity to engage in R&D. The purpose of the paper is to demonstrate that this higher propensity depends on the ownership share of controlled companies, besides the presence of co-ordination mechanisms. We develop an analytical model and we empirically test the predictions of the model using a dataset of Italian manufacturing firms. From the development of this model we derive three main implications: a) that there is no difference in R&D propensity between stand-alone firms and firms at the bottom of business groups; b) that head and intermediate firms have a higher R&D propensity compared to stand-alone and firms at the bottom of the group; c) that the intensity of R&D depends on the ownership shares in controlled companies. Overall the results of the empirical analysis are in accordance with the implications of the model.
|Date of creation:||Oct 2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.cmet05.it|
More information through EDIRC
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.:
- Sharon Belenzon & Tomer Berkovitz, 2007.
"Innovation in Business Groups,"
CEP Discussion Papers
dp0833, Centre for Economic Performance, LSE.
- Brusco, Sandro & Panunzi, Fausto, 2005.
"Reallocation of corporate resources and managerial incentives in internal capital markets,"
European Economic Review,
Elsevier, vol. 49(3), pages 659-681, April.
- Sandro Brusco & Fausto Panunzi, 2002. "Reallocation of Corporate Resources and Managerial Incentives in Internal Capital Markets," CESifo Working Paper Series 735, CESifo Group Munich.
- Brusco, Sandro & Panunzi, Fausto, 2000. "Reallocation of Corporate Resources and Managerial Incentives in Internal Capital Markets," CEPR Discussion Papers 2532, C.E.P.R. Discussion Papers.
- Elena Huergo & Jordi Jaumandreu, 2004. "How Does Probability of Innovation Change with Firm Age?," Small Business Economics, Springer, vol. 22(3_4), pages 193-207, 04.
- Wolfgang Becker & Juergen Peters, 2000. "Technological Opportunities, Absorptive Capacities, and Innovation," Discussion Paper Series 195, Universitaet Augsburg, Institute for Economics.
- Pierre BLANCHARD & Jean Pierre HUIBAN & Patrick SEVESTRE, 2005.
"R&D and Productivity in Corporate Groups: An Empirical Investigation Using a Panel of French Firms,"
Annales d'Economie et de Statistique,
ENSAE, issue 79-80, pages 461-485.
- Pierre Blanchard & Jean-Pierre Huiban & Patrick Sevestre, 2010. "R&D and Productivity in Corporate Groups: An Empirical Investigation Using a Panel of French Firms," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 461-485 National Bureau of Economic Research, Inc.
- Elena Cefis & Stephanie Rosenkranz & Utz Weitzel, 2009. "Effects of coordinated strategies on product and process R&D," Journal of Economics, Springer, vol. 96(3), pages 193-222, April.
When requesting a correction, please mention this item's handle: RePEc:cme:wpaper:1205. 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: (Donato Iacobucci)
If references are entirely missing, you can add them using this form.