Arbeitspapier
Agency costs and R&D: Evidence from Finnish SMEs
This paper examines empirically how firm ownership structure affects its research- and development (R&D) intensity. To begin with, a principal-agent problem created by the separation of the management of a firm (the agent) and its ownership (the principal) is reviewed, and prior empirical literature is looked at. We acknowledge that the empirical estimation of effects of corporate governance on firm’s activities has various problems, and provide evidence that ownership structure is determined endogenously. Using a sample of around 600 Finnish SMEs, the results of the Tobit estimations of firm R&D show that 1) entrepreneur’s ownership share has a U-shaped relation with a turning point at 51 percent, 2) employees’ ownership share has an inverse U-shaped relation, with a turning point at 47 percent, 3) the presence of a venture capitalist is positively related to R&D intensity. The results from the Tobit regressions cannot be interpreted as conclusive evidence of the actual causality between ownership and R&D, because of the endogeneity of the ownership variables. Instrumental variable estimation is used to attempt to solve the problem. Unfortunately only weak instruments are found and the two-stage least squares method gives no significant results as the standard errors became large.
- Sprache
-
Englisch
- Erschienen in
-
Series: ETLA Discussion Papers ; No. 859
- Klassifikation
-
Wirtschaft
- Thema
-
Ownership structure
R&D
agency costs
monitoring
SMEs
Eigentümerstruktur
Forschungs- und Technologiepolitik
Prinzipal-Agent-Theorie
Klein- und Mittelunternehmen
Finnland
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Väänänen, Lotta
- Ereignis
-
Veröffentlichung
- (wer)
-
The Research Institute of the Finnish Economy (ETLA)
- (wo)
-
Helsinki
- (wann)
-
2003
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Väänänen, Lotta
- The Research Institute of the Finnish Economy (ETLA)
Entstanden
- 2003
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