EconPapers    
Economics at your fingertips  
 

Incentives to innovate in response to competition: The role of agency costs

Evguenia Bessonova () and Ksenia Gonchar

Economic Systems, 2017, vol. 41, issue 1, 26-40

Abstract: This paper investigates the role of managerial ownership and incentive payment as potential drivers of innovation decisions by firms and as shifters of the competition-innovation link in the Russian manufacturing industry, where poorly protected property rights and a path-dependent market structure (typical for many transition economies) lead to a variety of outcomes. We use recent survey-based microdata for nearly 2000 non-listed companies in Russia. Our results suggest that managerial ownership, which initially evolved as a means of protecting against and resisting dysfunctional institutions, may stimulate decisions to undertake R&D and risky product innovations. Further, managerial ownership and competition are complementary motivations for R&D and innovation. Incentive payment to hired managers is a positive commitment instrument but has no impact on the competition-innovation link.

Keywords: Agency costs; Managerial ownership; Incentive contract; Competition; Innovation (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939362517300080
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:41:y:2017:i:1:p:26-40

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2020-01-03
Handle: RePEc:eee:ecosys:v:41:y:2017:i:1:p:26-40