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The Effects of Corporate Ownership Structure on R&D Expenditures: Comparison between KSE and KOSDAQ Listed Firms  

Cho, Shin (연세대학교 정보대학원)
Jung, Woo-Jin (연세대학교 정보대학원)
Publication Information
Journal of Korea Technology Innovation Society / v.20, no.1, 2017 , pp. 239-270 More about this Journal
Abstract
This paper examines the relationship between ownership structure and the intensity of R&D expenditures of a firm by analyzing the panel data composed of 553 manufacturing firms in KSE(Korea Stock Exchange) and KOSDAQ listed firms for the period of 2007-2014. The major findings are as follows; (1) Regarding the relationship between CEO stockholding and R&D intensity, we find the inverted-U shape relationship in KOSDAQ firms, consistent with the theoretical discussion and empirical studies on U.S. firms. The result suggests that management stockholding reduces agency problem at the R&D margin. On the contrary, the insignificant result in KSE firms seems to be due to the scant stockholding of most 'non-owner' CEOs. (2) Regarding the relationship between the largest shareholder's portion and R&D intensity, KSE firms exhibit negatively significant relationship, suggesting the existence of serious agency problem between the largest shareholder and the minor shareholders. This agency problem seems to be alleviated in KOSDAQ firms mainly because the founders with technology expertise are still in charge of the business. (3) Foreign investors seem to fail in effectively encouraging R&D expenditures in either KSE or KOSDAQ listed firms. This study contributes to the existing literature by showing for the first time that ownership structure affects R&D activities in different ways between KSE and KOSDAQ firms.
Keywords
Corporate Ownership Structure; R&D Expenditures; Agency Costs; KOSDAQ Listed Firms;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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