R&D investment around the world: Effects of ownership and performance-based cultural contexts

Journal Title
Journal ISSN
Volume Title
John Wiley & Sons, Inc.
This study examines how ownership by different types of shareholders affects firm‐level research and development (R&D) investment. Integrating agency and resource dependence theories, we predict that up to a certain level, firm ownership by banks, corporations, governments, and insiders will positively relate to R&D investment. However, as ownership continues to increase, these shareholders shift their focus to personal wealth concerns, which makes owners more conservative towards R&D investment, resulting in reductions of R&D investment. Applying an institution‐based view, we expect the norms associated with performance‐based national cultures to moderate the curvilinear relationships between ownership and R&D investment. We test our hypotheses with a sample of 11,262 firms from 35 countries and find that ownership by banks, corporations, and governments has a curvilinear inverted U‐shaped relationship with R&D investment. Further, operating in a performance‐based culture enhances the effects for corporation and government ownership. Our findings contribute unique insights about what drives the important strategic activity of investing in R&D. [ABSTRACT FROM AUTHOR] Copyright of Thunderbird International Business Review is the property of John Wiley & Sons, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Stock ownership, Government ownership, Government corporations, Investments
Lewellyn, K. B., & Bao, R. “Shuji.” (2021). R&D investment around the world: Effects of ownership and performance‐based cultural contexts. Thunderbird International Business Review, 63(2), 217–233. https://doi.org/10.1002/tie.22187