Governance Structure, Innovation and Internationalization: Evidence from India
Journal of International Management, Forthcoming
33 Pages Posted: 15 Mar 2013 Last revised: 21 Apr 2014
Date Written: March 1, 2013
We examine the impact of firm-level governance structure on the innovation and internationalization strategies of emerging market firms. We propose that in the case of emerging market firms, governance is a response to the prevailing institutional environment and affects the innovation and internationalization strategies of firms. Based on a longitudinal sample of 16,337 firm-year observations of Indian listed firms over a nine-year time period from 2001-2009, we find a positive effect of family ownership and group affiliation on R&D intensity and new foreign investments. Institutional ownership also positively affects new foreign investments, but has no effect on R&D intensity. Further, we find that R&D intensity interacts with family ownership, institutional ownership and group affiliation in affecting new foreign investments.
Keywords: Family ownership, Institutional ownership, Business groups, R&D intensity, Internationalization
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