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OWNERSHIP STRUCTURE AND R&D SPENDING: EVIDENCE FROM BORSA ISTANBUL

Year 2018, , 67 - 80, 01.01.2018
https://doi.org/10.17130/ijmeb.2018137574

Abstract

This paper examines the effects of ownership structure on firms’ R&D spending. In other words, this paper seeks to examine the effect of ownership concentration, institutional ownership and foreign ownership on the R&D spending practices. It is used a sample of 112 Turkish manufacturing firms listed Borsa Istanbul from 2009-2015. It is found that firms with foreign ownership have lower R&D spending.Foreign investors would utilize technological advantages at their home countries and/or other developed economies

References

  • Abrahams, T., & Sidhu, B. K. (1998). The role of R&D capitalisations in firm valuation and performance measurement. Australian Journal of Management, 23(2), 169-183.
  • Ahmed, K., & Jinan, M. (2011). The association between research and development expenditure and firm performance: Testing a life cycle hypothesis. International Journal of Accounting, Auditing and Performance Evaluation, 7(4), 267-286.
  • Aghion, P., Van Reenen, J., & Zingales, L. (2013). Innovation and institutional ownership. The American Economic Review, 103(1), 277-304.
  • Al-Horani, A., Pope, P. F., & Stark, A. W. (2003). Research and development activity and expected returns in the United Kingdom. European Finance Review, 7(1), 27-46.
  • Andersson, J., Nordwall, J., & Salomonsson, D. (2005). The link between ownership structure and firm performance: Evidence from Sweden’s listed companies. https://gupea.ub.gu. se/bitstream/2077/2266/1/gbs_thesis_37.pdf, 02.02.2017.
  • Barnhart, S. W., & Rosenstein, S. (1998). Board composition, managerial ownership, and firm performance: An empirical analysis. Financial Review, 33(4), 1-16.
  • Baysinger, B. D., Kosnik, R. D., & Turk, T. A. (1991). Effects of board and ownership structure on corporate R&D strategy. Academy of Management Journal, 34(1), 205-214.
  • Bhagat, S., & Black, B. (2001). The non-correlation between board independence and long- term firm performance. Journal of Corporation Law, 27, 231-274.
  • Beiner, S., Drobetz, W., Schmid, M. M., & Zimmermann, H. (2006). An integrated framework of corporate governance and firm valuation. European Financial Management, 12(2), 249-283.
  • Brickley, J. A., Lease, R. C., & Smith, C. W. (1988). Ownership structure and voting on antitakeover amendments. Journal of Financial Economics, 20, 267-291.
  • Brossard, O., Lavigne, S., & Sakinc, M. E. (2013). Ownership structures and R&D in Europe: The good institutional investors, the bad and ugly impatient shareholders. Industrial and Corporate Change, 22(4), 1031-1068.
  • Buckley, P. J., Wang, C., & Clegg, J. (2007). The impact of foreign ownership, local ownership and industry characteristics on spillover benefits from foreign direct investment in China. International Business Review, 16(2), 142-158.
  • Bushee, B. J. (1998). The influence of institutional investors on myopic R&D investment behavior. Accounting Review, 305-333.
  • Chambers, D., Jennings, R., & Thompson, R. B. (2002). Excess returns to R&D-intensive firms. Review of Accounting Studies, 7(2-3), 133-158.
  • Chan, L. K., Lakonishok, J., & Sougiannis, T. (2001). The stock market valuation of research and development expenditures. The Journal of Finance, 56(6), 2431-2456.
  • Chauvin, K. W., & Hirschey, M. (1993). Advertising, R&D expenditures and the market value of the firm. Financial management, 22(4), 128-140.
  • Cheng, J. L., & Bolon, D. S. (1993). The management of multinational R&D: A neglected topic in international business research. Journal of International Business Studies, 24(1), 1-18.
  • Cheung, K. Y., & Ping, L. (2004). Spillover effects of FDI on innovation in China: Evidence from the provincial data. China Economic Review, 15(1), 25-44.
  • Cho, D. S., & Kim, J. (2007). Outside directors, ownership structure and firm profitability in Korea. Corporate Governance: An International Review, 15(2), 239-250.
  • Choi, S. B., Lee, S. H., & Williams, C. (2011). Ownership and firm innovation in a transition economy: Evidence from China. Research Policy, 40(3), 441-452.
  • De Mello Jr, L. R. (1997). Foreign direct investment in developing countries and growth: A selective survey. The Journal of Development Studies, 34(1), 1-34.
  • Eberhart, A. C., Maxwell, W. F., & Siddique, A. R. (2004). An examination of long-term abnormal stock returns and operating performance following R&D increases. The Journal of Finance, 59(2), 623-650.
  • Elsayed, K. (2011). Board size and corporate performance: The missing role of board leadership structure. Journal of Management & Governance, 15(3), 415-446.
  • Eng, L. L., & Shackell, M. (2001). The implications of long-term performance plans and institutional ownership for firms’ research and development (R&D) investments. Journal of Accounting, Auditing & Finance, 16(2), 117-139.
  • Fauzi, F., & Locke, S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms.
  • Gassmann, O., & Zedtwitz, M. (2003). Trends and determinants of managing virtual R&D teams. R&D Management, 33(3), 243-262.
  • Ghaffar, A., & Khan, W. A. (2014). Impact of research and Development on Firm Performance. International Journal of Accounting and Financial Reporting, 4(1), 357.
  • Graves, S. B. (1988). Institutional ownership and corporate R&D in the computer industry. Academy of Management Journal, 31(2), 417-428.
  • Graves, S. B., & Waddock, S. A. (1990). Institutional ownership and control: Implications for long-term corporate strategy. The Executive, 4(1), 75-83.
  • Hill, C. W., & Snell, S. A. (1988). External control, corporate strategy, and firm performance in research intensive industries. Strategic Management Journal, 9(6), 577-590.
  • Holderness Clifford, G., Kroszner Randall, S., & Sheehan Dennis, P. (1999). Were the good old days that good? Evolution of managerial stock ownership and corporate governance since the great depression. Journal of Finance, 54, 353-384.
  • Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and- development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1-11.
  • Kochhar, R., & David, P. (1996). Institutional investors and firm innovation: A test of competing hypotheses. Strategic Management Journal, 73-84.
  • Kouznetsov, P., & Muravyev, A. (2001). Ownership structure and firm performance in Russia: The case of blue chips of the stock market (No. 01-10e). EERC Research Network, Russia and CIS.
  • Lev, B., Sarath, B., & Sougiannis, T. (2005). R&D reporting biases and their consequences. Contemporary Accounting Research, 22(4), 977-1026.
  • Mak, Y. T., & Kusnadi, Y. (2005). Size really matters: Further evidence on the negative relationship between board size and firm value. Pacific-Basin Finance Journal, 13(3), 301-318.
  • Minetti, R., Murro, P., & Paiella, M. (2012). Ownership structure, governance, and innovation: Evidence from Italy.https://editorialexpress.com/cgi-bin/conference/download.cgi?db_ name=ICEEE5&paper_id=160, 01.02.2017.
  • Molas-Gallart, J., & Tang, P. (2006). Ownership matters: Intellectual property, privatization and innovation. Research Policy, 35(2), 200-212.
  • O’Sullivan, M. (2000). The innovative enterprise and corporate governance. Cambridge Journal of Economics, 24(4), 393-416.
  • Oxelheim, L., & Randİy, T. (2003). The impact of foreign board membership on firm value. Journal of Banking & Finance, 27(12), 2369-2392.
  • Pearce, R. (1994). The internationalisation of research and development by multinational enterprises and the transfer sciences. Empirica, 21(3), 297-311.
  • Porta, R., Lopez de Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. The Journal of Finance, 54(2), 471-517.
  • Porter, M. E. (1991). Capital disadvantage: America’s failing capital investment system. Harvard Business Review, 70(5), 65-82.
  • Rossi, F., & Cebula, R. J. (2015). Ownership structure and R&D: An empirical analysis of Italian listed companies. PSL Quarterly Review, 68(275), 297-325.
  • Sharma, C. (2012). R&D and firm performance: Evidence from the Indian pharmaceutical industry. Journal of the Asia Pacific Economy, 17(2), 332-342.
  • Sougiannis, T. (1994). The accounting based valuation of corporate. R&D. Accounting review, 69(1), 44-68.
  • Sueyoshi, T., Goto, M., & Omi, Y. (2010). Corporate governance and firm performance: Evidence from Japanese manufacturing industries after the lost decade. European Journal of Operational Research, 203(3), 724-736.
  • Teng, D., & Jingtao, Y. (2014).Ownership, R&D intensity and performance: Evidence from transitional China. http://mbsportal.bl.uk/taster/subjareas/strategy/bam2014/strategy/ full/178364contribution200.pdf, 01.02.2017.
  • Vo, D., & Phan, T. (2013). Corporate governance and firm performance: Empirical evidence from Vietnam. Journal of Economic Development, 62-78.
  • Wang, Y., & Clift, B. (2009). Is there a “business case” for board diversity?. Pacific Accounting Review, 21(2), 88-103.
  • Yan Lam, T., & Kam Lee, S. (2008). CEO duality and firm performance: Evidence from Hong Kong. Corporate Governance: The international Journal of Business in Society, 8(3), 299-316.
  • Zahra, S. A., & Covin, J. G. (1995). Contextual influences on the corporate entrepreneurship- performance relationship: A longitudinal analysis. Journal of Business Venturing, 10(1), 43-58.
  • Zhang, Y., Li, H., Hitt, M. A., & Cui, G. (2007). R&D intensity and international joint venture performance in an emerging market: Moderating effects of market focus and ownership structure. Journal of International Business Studies, 38(6), 944-960.
  • Zeng, T., & Lin, H. C. (2011). Ownership structure and R&D spending: Evidence from China’s listed firms. Chinese Management Studies, 5(1), 82-93.

SAHİPLİK YAPISI VE AR-GE HARCAMALARI: BORSA İSTANBUL ÖRNEĞİ

Year 2018, , 67 - 80, 01.01.2018
https://doi.org/10.17130/ijmeb.2018137574

Abstract

Bu çalışmanın amacı sahiplik yapısının AR-GE harcamaları üzerindeki etkisini incelemektir. Başka bir ifade ile araştırmada; sahiplik yoğunlaşmasının, kurumsal yatırımcı sahipliğinin ve yabancı yatırımcı sahipliğinin AR-GE uygulamaları üzerindeki etkisi tespit edilecektir. Çalışmada 2009-2015 yılları arasında Borsa İstanbul’a kayıtlı 112 imalat sanayi firmasının verileri kullanılmıştır. Yapılan analizler sonucunda yabancı yatırımcıların daha düşük AR-GE harcamalarına sahip olduğu bulunmuştur. Bu durum; yabancı yatırımcılar kendi ana ülkelerindeki ve/veya diğer gelişmiş ekonomilerdeki teknolojik avantajları kullanmaları ile açıklanabilmektedir.

References

  • Abrahams, T., & Sidhu, B. K. (1998). The role of R&D capitalisations in firm valuation and performance measurement. Australian Journal of Management, 23(2), 169-183.
  • Ahmed, K., & Jinan, M. (2011). The association between research and development expenditure and firm performance: Testing a life cycle hypothesis. International Journal of Accounting, Auditing and Performance Evaluation, 7(4), 267-286.
  • Aghion, P., Van Reenen, J., & Zingales, L. (2013). Innovation and institutional ownership. The American Economic Review, 103(1), 277-304.
  • Al-Horani, A., Pope, P. F., & Stark, A. W. (2003). Research and development activity and expected returns in the United Kingdom. European Finance Review, 7(1), 27-46.
  • Andersson, J., Nordwall, J., & Salomonsson, D. (2005). The link between ownership structure and firm performance: Evidence from Sweden’s listed companies. https://gupea.ub.gu. se/bitstream/2077/2266/1/gbs_thesis_37.pdf, 02.02.2017.
  • Barnhart, S. W., & Rosenstein, S. (1998). Board composition, managerial ownership, and firm performance: An empirical analysis. Financial Review, 33(4), 1-16.
  • Baysinger, B. D., Kosnik, R. D., & Turk, T. A. (1991). Effects of board and ownership structure on corporate R&D strategy. Academy of Management Journal, 34(1), 205-214.
  • Bhagat, S., & Black, B. (2001). The non-correlation between board independence and long- term firm performance. Journal of Corporation Law, 27, 231-274.
  • Beiner, S., Drobetz, W., Schmid, M. M., & Zimmermann, H. (2006). An integrated framework of corporate governance and firm valuation. European Financial Management, 12(2), 249-283.
  • Brickley, J. A., Lease, R. C., & Smith, C. W. (1988). Ownership structure and voting on antitakeover amendments. Journal of Financial Economics, 20, 267-291.
  • Brossard, O., Lavigne, S., & Sakinc, M. E. (2013). Ownership structures and R&D in Europe: The good institutional investors, the bad and ugly impatient shareholders. Industrial and Corporate Change, 22(4), 1031-1068.
  • Buckley, P. J., Wang, C., & Clegg, J. (2007). The impact of foreign ownership, local ownership and industry characteristics on spillover benefits from foreign direct investment in China. International Business Review, 16(2), 142-158.
  • Bushee, B. J. (1998). The influence of institutional investors on myopic R&D investment behavior. Accounting Review, 305-333.
  • Chambers, D., Jennings, R., & Thompson, R. B. (2002). Excess returns to R&D-intensive firms. Review of Accounting Studies, 7(2-3), 133-158.
  • Chan, L. K., Lakonishok, J., & Sougiannis, T. (2001). The stock market valuation of research and development expenditures. The Journal of Finance, 56(6), 2431-2456.
  • Chauvin, K. W., & Hirschey, M. (1993). Advertising, R&D expenditures and the market value of the firm. Financial management, 22(4), 128-140.
  • Cheng, J. L., & Bolon, D. S. (1993). The management of multinational R&D: A neglected topic in international business research. Journal of International Business Studies, 24(1), 1-18.
  • Cheung, K. Y., & Ping, L. (2004). Spillover effects of FDI on innovation in China: Evidence from the provincial data. China Economic Review, 15(1), 25-44.
  • Cho, D. S., & Kim, J. (2007). Outside directors, ownership structure and firm profitability in Korea. Corporate Governance: An International Review, 15(2), 239-250.
  • Choi, S. B., Lee, S. H., & Williams, C. (2011). Ownership and firm innovation in a transition economy: Evidence from China. Research Policy, 40(3), 441-452.
  • De Mello Jr, L. R. (1997). Foreign direct investment in developing countries and growth: A selective survey. The Journal of Development Studies, 34(1), 1-34.
  • Eberhart, A. C., Maxwell, W. F., & Siddique, A. R. (2004). An examination of long-term abnormal stock returns and operating performance following R&D increases. The Journal of Finance, 59(2), 623-650.
  • Elsayed, K. (2011). Board size and corporate performance: The missing role of board leadership structure. Journal of Management & Governance, 15(3), 415-446.
  • Eng, L. L., & Shackell, M. (2001). The implications of long-term performance plans and institutional ownership for firms’ research and development (R&D) investments. Journal of Accounting, Auditing & Finance, 16(2), 117-139.
  • Fauzi, F., & Locke, S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms.
  • Gassmann, O., & Zedtwitz, M. (2003). Trends and determinants of managing virtual R&D teams. R&D Management, 33(3), 243-262.
  • Ghaffar, A., & Khan, W. A. (2014). Impact of research and Development on Firm Performance. International Journal of Accounting and Financial Reporting, 4(1), 357.
  • Graves, S. B. (1988). Institutional ownership and corporate R&D in the computer industry. Academy of Management Journal, 31(2), 417-428.
  • Graves, S. B., & Waddock, S. A. (1990). Institutional ownership and control: Implications for long-term corporate strategy. The Executive, 4(1), 75-83.
  • Hill, C. W., & Snell, S. A. (1988). External control, corporate strategy, and firm performance in research intensive industries. Strategic Management Journal, 9(6), 577-590.
  • Holderness Clifford, G., Kroszner Randall, S., & Sheehan Dennis, P. (1999). Were the good old days that good? Evolution of managerial stock ownership and corporate governance since the great depression. Journal of Finance, 54, 353-384.
  • Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and- development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1-11.
  • Kochhar, R., & David, P. (1996). Institutional investors and firm innovation: A test of competing hypotheses. Strategic Management Journal, 73-84.
  • Kouznetsov, P., & Muravyev, A. (2001). Ownership structure and firm performance in Russia: The case of blue chips of the stock market (No. 01-10e). EERC Research Network, Russia and CIS.
  • Lev, B., Sarath, B., & Sougiannis, T. (2005). R&D reporting biases and their consequences. Contemporary Accounting Research, 22(4), 977-1026.
  • Mak, Y. T., & Kusnadi, Y. (2005). Size really matters: Further evidence on the negative relationship between board size and firm value. Pacific-Basin Finance Journal, 13(3), 301-318.
  • Minetti, R., Murro, P., & Paiella, M. (2012). Ownership structure, governance, and innovation: Evidence from Italy.https://editorialexpress.com/cgi-bin/conference/download.cgi?db_ name=ICEEE5&paper_id=160, 01.02.2017.
  • Molas-Gallart, J., & Tang, P. (2006). Ownership matters: Intellectual property, privatization and innovation. Research Policy, 35(2), 200-212.
  • O’Sullivan, M. (2000). The innovative enterprise and corporate governance. Cambridge Journal of Economics, 24(4), 393-416.
  • Oxelheim, L., & Randİy, T. (2003). The impact of foreign board membership on firm value. Journal of Banking & Finance, 27(12), 2369-2392.
  • Pearce, R. (1994). The internationalisation of research and development by multinational enterprises and the transfer sciences. Empirica, 21(3), 297-311.
  • Porta, R., Lopez de Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. The Journal of Finance, 54(2), 471-517.
  • Porter, M. E. (1991). Capital disadvantage: America’s failing capital investment system. Harvard Business Review, 70(5), 65-82.
  • Rossi, F., & Cebula, R. J. (2015). Ownership structure and R&D: An empirical analysis of Italian listed companies. PSL Quarterly Review, 68(275), 297-325.
  • Sharma, C. (2012). R&D and firm performance: Evidence from the Indian pharmaceutical industry. Journal of the Asia Pacific Economy, 17(2), 332-342.
  • Sougiannis, T. (1994). The accounting based valuation of corporate. R&D. Accounting review, 69(1), 44-68.
  • Sueyoshi, T., Goto, M., & Omi, Y. (2010). Corporate governance and firm performance: Evidence from Japanese manufacturing industries after the lost decade. European Journal of Operational Research, 203(3), 724-736.
  • Teng, D., & Jingtao, Y. (2014).Ownership, R&D intensity and performance: Evidence from transitional China. http://mbsportal.bl.uk/taster/subjareas/strategy/bam2014/strategy/ full/178364contribution200.pdf, 01.02.2017.
  • Vo, D., & Phan, T. (2013). Corporate governance and firm performance: Empirical evidence from Vietnam. Journal of Economic Development, 62-78.
  • Wang, Y., & Clift, B. (2009). Is there a “business case” for board diversity?. Pacific Accounting Review, 21(2), 88-103.
  • Yan Lam, T., & Kam Lee, S. (2008). CEO duality and firm performance: Evidence from Hong Kong. Corporate Governance: The international Journal of Business in Society, 8(3), 299-316.
  • Zahra, S. A., & Covin, J. G. (1995). Contextual influences on the corporate entrepreneurship- performance relationship: A longitudinal analysis. Journal of Business Venturing, 10(1), 43-58.
  • Zhang, Y., Li, H., Hitt, M. A., & Cui, G. (2007). R&D intensity and international joint venture performance in an emerging market: Moderating effects of market focus and ownership structure. Journal of International Business Studies, 38(6), 944-960.
  • Zeng, T., & Lin, H. C. (2011). Ownership structure and R&D spending: Evidence from China’s listed firms. Chinese Management Studies, 5(1), 82-93.
There are 54 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Mesut Doğan This is me

Murad Tirkakioğlu This is me

Publication Date January 1, 2018
Published in Issue Year 2018

Cite

APA Doğan, M., & Tirkakioğlu, M. (2018). SAHİPLİK YAPISI VE AR-GE HARCAMALARI: BORSA İSTANBUL ÖRNEĞİ. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 14(1), 67-80. https://doi.org/10.17130/ijmeb.2018137574