R&D investments in family and founder firms: An agency perspective

Joern Block

Journal of Business Venturing, 2012, vol. 27, issue 2, 248-265

Abstract: Investments in R&D can influence a firm's ability to develop new products and to create and adopt innovative technologies that may enhance productivity. However, due to uncertainty regarding the outcome, investments in R&D may lead to an agency problem between the owners and the managers of a firm. Family and founder firms are often considered to be different in their agency situation than other firms, which may have an influence on R&D investments. This paper analyzes R&D spending in family and founder firms versus other firms. The results show that while family ownership decreases the level of R&D intensity, ownership by lone founders has a positive effect not only on R&D intensity but also on the level of R&D productivity. The paper contributes to the understanding of the role of entrepreneurship in making high risk/high return R&D decisions.

Keywords: Lone founder firms; Family firms; R&D spending; R&D productivity; Entrepreneurial orientation; Agency theory; Monitoring (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (182)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:27:y:2012:i:2:p:248-265

DOI: 10.1016/j.jbusvent.2010.09.003

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