Corporate Governance and Innovation
Quinnipiac University - Department of Economics
Matthew L. O'Connor
February 28, 2011
Journal of Financial and Quantitative Analysis, Forthcoming
We use Tobin's q models of investments to estimate the relationship between corporate governance and the level of innovative activity. Simple OLS models suggest that poor governance reduces innovative activity. However, OLS results are sensitive to controlling for serial correlation, unobserved effects, or using instrumental variables to control of simultaneity. Controlling for these effects substantially reduces or eliminates the relationship between governance and innovation activity.
Number of Pages in PDF File: 31
Keywords: Corporate Governance, Research and Development
JEL Classification: G34, O32
Date posted: March 6, 2011
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