Corporate governance’ impact on research and development

Wai-Kwong Chu, Nien-Tzu Yang and Sheng-Yung Yang

Journal of Business Research, 2016, vol. 69, issue 6, 2239-2243

Abstract: This study examines the effects of legal and investor protection mechanisms on the efficiency of R&D. This study makes two contributions to the literature. First, when a company lists shares in a common law country or one with higher investor protection (i.e., a company has better country-level corporate governance), the R&D investments of companies create more value. Second, companies that issue ADRs generate higher value from their R&D investments than those that do not issue ADRs. For some companies without ADR issues, their R&D investments decrease the market value of the company. The issuance of ADR strengthens the level of supervision, reducing the agency problem and inducing a higher value of their R&D investment. To the best of our knowledge, no previous studies have examined this phenomenon.

Keywords: R&D; ADRs; Supervision; LLSV; Corporate governance; fsQCA (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:69:y:2016:i:6:p:2239-2243

DOI: 10.1016/j.jbusres.2015.12.036

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