The Effects of Owner Idendity and Financial Markets on R&D Investments: A Study of Western European Firms

42 Pages Posted: 9 May 2005

See all articles by Federico Munari

Federico Munari

University of Bologna - Department of Management

Raffaele Oriani

Luiss Guido Carli University

Maurizio Sobrero

University of Bologna - Department of Management

Date Written: November 2005

Abstract

In this paper we theoretically analyze and empirically test the influence of stock market investors, the degree of ownership concentration and the identity of large shareholders on firm-level R&D investments. Our analysis is based on a unique dataset of 1,000 firms publicly traded in six European countries (France, Germany, Italy, Norway, Sweden and the UK). Controlling for industry- and firm-level effects, our findings show that a high share of institutional investors within national financial markets is negatively associated with widely held corporations' R&D investments. Moreover, higher shares held by families and financial institutions in a firm's ownership are negatively associated with R&D investments. Results are robust to potential sample selection biases due to firms' discretional R&D disclosure.

Keywords: Corporate Governance, Ownwership Structure, R&D, Innovation, Market Value

JEL Classification: G15, G32, O31, O33

Suggested Citation

Munari, Federico and Oriani, Raffaele and Sobrero, Maurizio, The Effects of Owner Idendity and Financial Markets on R&D Investments: A Study of Western European Firms (November 2005). Available at SSRN: https://ssrn.com/abstract=717684 or http://dx.doi.org/10.2139/ssrn.717684

Federico Munari (Contact Author)

University of Bologna - Department of Management ( email )

Piazza Scaravilli 1
Bologna, Bologna 40126
ITALY
051-2093954 (Phone)
051-2093949 (Fax)

Raffaele Oriani

Luiss Guido Carli University ( email )

Viale Romania, 32
Rome, 00196
Italy
+390685225908 (Phone)

Maurizio Sobrero

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
40126 Bologna, Bologna 40126
Italy
+39 051 2098076 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
222
Abstract Views
1,115
rank
39,916
PlumX Metrics