Ownership structure, business group affiliation and R&D investments

Y. R. Choi, S. A. Zahra, T. Yoshikawa, B. H. Han

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Scopus citations

Abstract

Existing governance theories offer contrasting views on the potential effect that controlling owners have on a firm's innovation investment decisions: the stewardship perspective suggests a positive influence, whereas the principal-principal (PP) conflict perspective posits a negative influence. In this study, we attempt to reconcile these views. We propose that business group affiliation determines the extent to which the interests of controlling owners and affiliated firms are congruent, and may motivate controlling owners to behave opportunistically. Our analysis of Korean companies shows that controlling owners of independent firms significantly promote R&D investments, particularly when growth opportunities are plentiful. However, the relationship becomes much weaker for business group affiliates.

Original languageEnglish (US)
Title of host publication2012 IEEE 6th International Conference on Management of Innovation and Technology, ICMIT 2012
Pages82-87
Number of pages6
DOIs
StatePublished - 2012
Event2012 IEEE 6th International Conference on Management of Innovation and Technology, ICMIT 2012 - Bali, Indonesia
Duration: Jun 11 2012Jun 13 2012

Publication series

Name2012 IEEE 6th International Conference on Management of Innovation and Technology, ICMIT 2012

Other

Other2012 IEEE 6th International Conference on Management of Innovation and Technology, ICMIT 2012
Country/TerritoryIndonesia
CityBali
Period6/11/126/13/12

Keywords

  • R&D investments
  • business group
  • controlling ownership

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