Corporate governance and research and development: Evidence from Japan

Kaoru Hosono, Masayo Tomiyama and Tsutomu Miyagawa
Authors registered in the RePEc Author Service: Masayo Shikimi

Economics of Innovation and New Technology, 2004, vol. 13, issue 2, 141-164

Abstract: This paper investigates the effects of the ownership structure on the R&D intensity. Using the Japanese machine-manufacturing firm data from 1987 till 1998, we first found that the effects of R&D on stock market valuation and TFP growth were significantly positive in the latter half of the 1990s. Next, analyzing the determinants of the R&D intensity in 1998, we found that the shareholding ratios of large shareholders and the leverage ratios were positively correlated with R&D intensity, while the proportion of bank loans to total debt was negatively correlated with it. These results are consistent with the hypotheses that stress the disciplinary roles of large shareholders and debt. It is also consistent with a bank's holdup hypothesis. Finally, comparing the results of 1998 with those of 1989, we found that the positive roles of keiretsu affiliation and cross-shareholdings disappeared during the last decade.

Keywords: R&D; Corporate governance; Ownership structure; Japan (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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DOI: 10.1080/10438590410001628125

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