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

See all articles by Fabrizio Rossi

Fabrizio Rossi

University of Cassino and Southern Lazio

Richard J. Cebula

Armstrong Atlantic State University; Jacksonville University (Florida)

Date Written: August 4, 2015

Abstract

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

Suggested Citation

Rossi, Fabrizio and Cebula, Richard J., Does the Board of Directors Affect the Extent of Corporate R&D? Evidence from Italian Listed Companies (August 4, 2015). ECONOMICS BULLETIN 35(4):A258 · DECEMBER 2015. Available at SSRN: https://ssrn.com/abstract=2726301

Fabrizio Rossi (Contact Author)

University of Cassino and Southern Lazio ( email )

Via G. Di Biasio, 43
Cassino, Frosinone 03043
Italy

Richard J. Cebula

Armstrong Atlantic State University ( email )

11935 Abercorn Street
Savannah, GA 31419
912-921-3781 (Phone)
912-921-3782 (Fax)

Jacksonville University (Florida) ( email )

Jacksonville, FL 32211
United States

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