Management Control and Innovative Activity

Dirk Czarnitzki and Kornelius Kraft

No 00-68, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper discusses theoretically the different incentives of managers versus firm owners to invest in innovative activities. There are opposing effects concerning R&D intensity in the manager-controlled firm. Our study on the determinants of R&D intensity presents empirical results concerning this question. A sample of German firms with 3,978 observations is used and it turns out that the owner-led firms invest less into R&D than the managerial firms. With respect to the managerled firms, expenditures on R&D depend on the control exerted. If capital shares are widely dispersed and managers are thus only controlled a little by owners, they invest more into R&D. Owner-led firms and managers who are strongly controlled have a very similar R&D intensity.

Keywords: Innovative Activity; Managerial versus Owner-led Firms; Incentives; Tobit Regression (search for similar items in EconPapers)
JEL-codes: C24 D21 O31 O32 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (3)

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Journal Article: Management Control and Innovative Activity (2004)
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