Does the Board of Directors Affect the Extent of Corporate R&D? Evidence from Italian Listed Companies
ECONOMICS BULLETIN 35(4):A258 · DECEMBER 2015
Posted: 3 Feb 2016
Date Written: August 4, 2015
Using a panel dataset for 369 firm-year observations during the period 2005-2013 in the Italian context, we investigate the impact of certain characteristics of corporate boards on the magnitude of corporate Research and Development (R&D). Our findings reveal a negative relationship between R&D and board size on the one hand and between R&D and board ownership on the other hand. Moreover, we find strong evidence of a positive and statistically significant relationship between R&D and independent corporate board directors. In addition, we also find a relationship between R&D and board diversity effect, as measured by women and foreign members on the boardroom. Our study uses multiple econometric models to address endogeneity issues.
Keywords: Board of Directors; R&D; Agency Theory; Corporate Governance
JEL Classification: G30; G34; O32
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