Corporate Restructuring and R&D: A Panel Data Analysis for the Chemical Industry

IGIER Working Paper No. 173

32 Pages Posted: 1 Mar 2001

See all articles by Ashish Arora

Ashish Arora

Duke University - Fuqua School of Business; National Bureau of Economics Research; Duke Innovation & Entrepreneurship Initiative

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Marco Da Rin

Tilburg University, Department of Finance; Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Date Written: September 2000

Abstract

We contribute a novel approach to the existing literature on the effects of restructuring on R&D investment by focussing on a single industry, chemicals. The chemical industry is very research intensive and has experienced thorough restructuring since the early 1980s. By focussing on a single industry we are able to identify the technological and R&D features of its segments. This is important, since there is evidence that restructuring affects R&D differently in businesses with different technological features. However, no study so far has provided a systematic inquiry into this link. Using a panel of 535 European, American, and Japanese firms for the years 1987-1997 we find restructuring to be an important component in the observed changes in R&D intensity. We show that restructuring affects R&D both through changes in size and through changes in the composition of business portfolios, and that these effects differ across industry segments.

JEL Classification: G34, L65, O32

Suggested Citation

Arora, Ashish and Ceccagnoli, Marco and Da Rin, Marco, Corporate Restructuring and R&D: A Panel Data Analysis for the Chemical Industry (September 2000). IGIER Working Paper No. 173. Available at SSRN: https://ssrn.com/abstract=261652 or http://dx.doi.org/10.2139/ssrn.261652

Ashish Arora (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economics Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Marco Ceccagnoli

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Marco Da Rin

Tilburg University, Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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