Ownership Structure and R&D: An Empirical Analysis of Italian Listed Companies

PSL Quarterly Review, vol. 68 n. 275, 2015

29 Pages Posted: 18 Jan 2018

See all articles by Fabrizio Rossi

Fabrizio Rossi

University of Cassino and Southern Lazio

Richard J. Cebula

Armstrong Atlantic State University; Jacksonville University (Florida)

Multiple version iconThere are 2 versions of this paper

Date Written: December 12, 2015

Abstract

The objective of this study is to explore the relationship between research and development outlays (R&D) and firm ownership structure for the public corporations listed on the Italian stock exchange. There is literature on the impact of corporate governance on firms’ innovation, and specifically on the relation between ownership structures and innovation. However, related empirical research is still in its infancy, with most contributions focused on the USA. Using a sample of 369 firm-year observations over the period 2005-2013, we investigate the relationship between R&D outlays and ownership structure estimating both a the fixed-effects panel model and a dynamic panel data system-GMM model. We consider various indicators of corporate governance, such as ownership concentration, board ownership, and institutional investors. Our findings reveal a negative relationship between R&D outlays and ownership concentration. Furthermore, we find a positive relationship between R&D investments and institutional investors, and a positive relationship between R&D outlays on the one hand and both firm size and firm age on the other hand. Finally, we find a negative relationship between R&D outlays and the debt-to-capital ratio.

Keywords: G32, G34, O32

JEL Classification: Ownership structure, corporate governance, R&D, agency theo

Suggested Citation

Rossi, Fabrizio and Cebula, Richard J., Ownership Structure and R&D: An Empirical Analysis of Italian Listed Companies (December 12, 2015). PSL Quarterly Review, vol. 68 n. 275, 2015. Available at SSRN: https://ssrn.com/abstract=3100791

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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