This study analyzes the impact of ownership structure on R&D investments in the United States and Japan. It begins with the premise that U.S. and Japanese firms have distinct patterns of ownership that may result in disparities in R&D investments. Agency theory and stewardship theory are used to hypothesize about the relationship between ownership and R&D investments. Empirical evidence shows that the level of ownership concentration, and its impact, differ across countries. We argue that these differences result from a mixture of motives and incentives. With communism laid to rest. .. it has become fashionable to talk of numerous capitalist "models"-the American model.., .in which firms feed on a huge and liquid stock market; the Japanese one, in which groups of firms and banks are bound together through complex webs of crossholdings.

No abstract