R&D, Liquidity Constraints, and Corporate Governance / Investitionen in FuE, Finanzierungsrestriktionen und Unternehmenssteuerung

Haid Alfred () and Weigand Jürgen ()
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Haid Alfred: Deutsches Institut für Wirtschaftsforschung, Königin-Luise-Str. 5, D-14195 Berlin, Germany
Weigand Jürgen: Otto Beisheim Graduate School of Management WHU Koblenz, Burgplatz 2, D-56179 Vallendar, Germany, and CPB Netherlands Bureau for Economic Policy Analysis, Van Stolkweg 14, PO Box 80510, 2508 GM The Hague, The Netherlands

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2001, vol. 221, issue 2, 145-167

Abstract: The paper discusses the link between financing R&D and tangible investment, firm size, and corporate governance. Mechanisms of corporate governance, such as the presence of large shareholders or stakeholders, may reduce agency and specificity problems and improve access to external finance. High ownership concentration, cross-shareholdings of industrial firms, and banks as blockholders are main features of the German system of corporate governance. This networkorientation is often seen as alleviating agency problems and providing sufficient finance for risky long-term investment such as R&D. However, no empirical evidence has been presented yet supporting this claim. Therefore, we base our empirical analysis on a panel data set of 106 large and medium-sized German companies, which reported R&D investment throughout the period 1987 to 1993. We find evidence that R&D and tangible investment of owner-controlled firms is constrained by the availability of internal and external funds. No such liquidity constraints are found for manager-controlled firms. Further, for these firms we observe a significant negative impact of firm size and market concentration on R&D investment, rejecting the Neo-Schumpeter hypotheses.

Keywords: R&D investment; corporate finance; corporate governance; F&E-Investitionen; Finanzierung; Unternehmensführungstrukturen (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:221:y:2001:i:2:p:145-167

DOI: 10.1515/jbnst-2001-0203

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