The Effect of Investor Protection on Cross-Country Differences in R&D Investments

Shou-Min Tsao and Hsueh-Tien Lu

Advances in Management and Applied Economics, 2018, vol. 8, issue 4, 5

Abstract: This study examines international differences in firms’ R&D investments across 31 countries between 2006 to 2014. We analyze whether the level of investor protection, defined as the extent of minority shareholder rights and the quality of legal enforcement, is associated with cross-country differences in R&D investments. We find that strong investor protection reduces the conflicts of interest and information asymmetry between insiders and outsiders associated with R&D investments and, therefore, encourages value-enhancing R&D investments. In addition, we find that strong investor protection mitigates the dependency of firms’ R&D investments on their internal resources and reduces R&D investment–cash flow sensitivity. JEL classification numbers: G15, G31, G32, O31Keywords: Investor protection, R&D investments, R&D investment–cash flow sensitivity.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.scienpress.com/Upload/AMAE%2fVol%208_4_5.pdf (application/pdf)

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:spt:admaec:v:8:y:2018:i:4:f:8_4_5

Access Statistics for this article

More articles in Advances in Management and Applied Economics from SCIENPRESS Ltd
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().