The Relation between Cash Holdings and R&D Expenditures According to Ownership Structure

Hyuna Kim () and Sun-Young Park ()

Eurasian Business Review, 2012, vol. 2, issue 2, 25-42

Abstract: In this paper, we examine how the cash holdings have an impact on R&D expenditures and whether the ownership mechanisms moderate the R&D expenditures- the resource of internal funds relationship. The result showed that cash holdings have a positively relationship with R&D expenditures. Specially, we found that institutional ownership had a positive moderating effect of the R&D expenditures-the resource of internal funds relationship. In additional analysis, the large business group and the share of managers doesn’t moderate the relationship between cash holdings and R&D expenditures. These results provide that institutional investor in Korea tend to be long-term oriented, “active” and “sophisticated” investor. They are less likely to evaluate corporate executives on the basis of short-term earnings alone and are more likely to support value-creating. Copyright Eurasia Business and Economics Society 2012

Keywords: Cash Holdings; R&D Expenditures; R&D Investments; Ownership Mechanisms; Ownership tructure (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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DOI: 10.14208/BF03353811

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