Market concentration, corporate governance and innovation: partial and combined effects in US-listed firms

Mehmet Ugur () and Nawar Hashem ()

No 8840, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: Mehmet Ugur and Nawar Hashem aim to contribute to the debate by investigating both partial and combined effects of corporate governance and market concentration on innovation. Utilising a dataset for 1,400 non-financial US-listed companies and two-way cluster-robust estimation methodology, they report several findings. First, the relationship between market concentration and innovation is non-linear. Secondly, the relationship has a U-shape in the case of input measure of innovation (research and development - R&D – expenditures); but it has an inverted-U shape when net book-value of brands and patents is used as output measure of innovation. Third, corporate governance indicators such as antitakeover defences and insider control tend to have a negative partial effect on R&D expenditures but a positive partial effect on net book-value of brands and patents. Finally, when interacted with market concentration, anti-takeover defences and insider control act as complements to market concentration.

Keywords: innovation; competition; corporate governance; two-way cluster-robust estimation (search for similar items in EconPapers)
Date: 2012
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Published in Journal of Governance and Regulation 3/2.1(2012): pp. 199

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Related works:
Working Paper: Market Concentration, Corporate Governance and Innovation: Partial and Combined Effects in US-Listed Firms (2012)
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