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.
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in: Contributions in Memory of Zvi Griliches, pages 461-485
National Bureau of Economic Research, Inc.
- Pierre Blanchard & Jean Pierre Huiban & Patrick Sevestre, 2005. "R&D and Productivity in Corporate Groups: An Empirical Investigation Using a Panel of French Firms," Annals of Economics and Statistics, GENES, issue 79-80, pages 461-485.
- Pierre Blanchard & Jean-Pierre Huiban & Patrick Sevestre, 2005. "R&D and productivity in corporate groups: an empirical investigation using a panel of French firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00279983, HAL.
- 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.
- Brusco, Sandro & Panunzi, Fausto, 2000.
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CEPR Discussion Papers
2532, C.E.P.R. Discussion Papers.
- 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.
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- repec:cup:cbooks:9780521848053 is not listed on IDEAS
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