Innovation at State-Owned Enterprises
73 Pages Posted: 28 Mar 2018 Last revised: 24 Sep 2019
Date Written: September 3, 2019
We investigate the impact of state ownership on the innovativeness of European listed firms. We find that state-owned enterprises (SOEs) invest more in R&D than private firms, thanks to easier access to bank financing. However, SOEs controlled by politicians with electoral concerns and SOEs with politically appointed managers invest no more than private firms. On the output side, SOEs produce fewer patents per dollar invested. We also find evidence that government-controlled SOEs produce patents with more citations, oriented towards sustainable-technologies, but with lower commercial value, consistent with the view that they emphasize innovation with public good characteristics over commercial returns.
Keywords: innovation, state ownership
JEL Classification: G32, G15, G38
Suggested Citation: Suggested Citation