Corporate governance and R&amp;D investment: does firm size matter?

Muhammad, Hussain; Migliori, Stefania; Consorti, Augusta

doi:10.1080/09537325.2022.2042508

Cited by 19 publications

(5 citation statements)

References 31 publications

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“…Moreover, larger board sizes are associated with greater diversity of expertise and perspectives, facilitating strategic decision-making regarding R&D investments (Muhammad et al, 2024). Firms operating in industries with higher concentrations may face lesser competitive pressures for innovation, resulting in lower R&D expenditure.…”

Section: Determinants Of Corporate Randd Expenditurementioning

confidence: 99%

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Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Pu,

Zulkafli

2024

Strategic Management

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Background: In the contemporary business environment, corporate research and development (R&D) expenditure is pivotal for fostering technological innovation and advancing technological progress. While much research has focused on the influence of boards of directors on corporate innovation, the role of foreign directors in shaping corporate R&D expenditure, particularly in developing countries, remains underexplored. Purpose: The aim of this paper is to investigate the pivotal role of foreign directors in corporate R&D expenditure within Chinese listed manufacturing firms. It also provides micro-level evidence of the economic consequences of foreign directors, considering heterogeneity across property rights, industry, regional dimensions, and board positions. Study design/methodology/approach: This study utilizes the largest and most detailed dataset of Chinese listed manufacturing firms in the CSMAR database, offering comprehensive proxy variables. The sample encompasses 18,273 observations from 2008 to 2021. Multivariate regression models, employing static two-way fixed effects models with clustered robust standard errors and dynamic generalized method of moment (GMM) models, were established to investigate the relationship between foreign directors and corporate R&D expenditure. Sensitivity tests involve the substitution of dependent and core explanatory variables. Moreover, heterogeneity test and situational analysis are conducted. Findings/conclusions: The results confirmed a significant augmentation in corporate R&D expenditure attributable to foreign directors. Heterogeneity analysis reveals that the positive impact of foreign directors on R&D expenditure is more pronounced in private-owned enterprises, high-tech industries, and economically developed regions of China. Situational analysis further confirms that foreign independent directors are the main driving force behind this effect. Limitations/future research: This research is confined to a single-country and single-industry sample, without a comprehensive consideration of the individual traits of foreign directors. Future research avenues could involve cross-national comparisons and a more nuanced categorization of foreign directors.

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Section: Determinants Of Corporate Randd Expenditurementioning

confidence: 99%

“…O n l i n e f i r s t growth, including R&D (Muhammad et al, 2024;Shi et al, 2023). Conversely, non-independent directors may lean more towards their interests or those of the management team, potentially favouring short-term profit investments over the high-risk, long-term nature of R&D expenditure (Li et al, 2023).…”

Section: Situational Analysismentioning

confidence: 99%

Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Pu,

Zulkafli

2024

Strategic Management

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“…Large corporations have larger market shares and greater risk management abilities than smaller ones. Therefore, corporate size has a significant positive effect on R&D investment (Muhammad et al, 2022;Shefer and Frenkel, 2005). We use the log of a corporation's total assets to measure corporate size (Size).…”

Section: Control Variablesmentioning

confidence: 99%

Does supply chain concentration promote or inhibit corporate R&D investment?

Zhao,

Fan,

Shao

et al. 2024

CMS

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Purpose This study aims to investigate the impact of supply chain concentration (SCC) on corporate research and development (R&D) investment and determine the moderating roles of industry concentration and financing constraints on the relationship between SCC and R&D investment. Design/methodology/approach The study collected data from Chinese listed companies, used the fixed effects model to test the research hypotheses and further used the two-stage Heckman test and propensity score matching (PSM) to address potential endogeneity issues. Findings The result reveals a negative impact of SCC on corporate R&D investment. In addition, industry concentration mitigates the negative impact of SCC on corporate R&D investment, but financing constraints strengthen the negative impact. Originality/value This study introduces the concept of SCC and empirically tests its effect on R&D investment, further explaining the lack of corporate innovation. This study inspires companies to strengthen SC management and weigh the level of SCC with environmental factors.

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“…Many recent studies have highlighted the importance of corporate governance from a variety of perspectives (Chen and Lin 2022;Askarzadeh et al 2022;Ramírez et al 2022;Ghabri 2022;Si Tayeb et al 2022;Chung et al 2022;Muhammad et al 2022;Bimo et al 2022;Farah et al 2021;Al-Gamrh et al 2020;Al-ahdal et al 2020;dos Santos et al 2019;Adel et al 2019;Shahid and Abbas 2019). We conducted a survey, reaching out to a wide range of individuals at firms and corporations in Yemen who are certified public accountants (YECPAs).…”

Section: Samplementioning

confidence: 99%

Examining the Impact of Corporate Governance on Investors and Investee Companies: Evidence from Yemen

2023

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The purpose of this study was to determine whether corporate governance is an important and effective technique for enhancing investors’ confidence in existing and prospective companies and for creating opportunities for safe investment in Yemen. A survey was conducted among certified public accountants to assess the importance of corporate governance. We employed regression analysis to test our hypothesis. According to the results of the study, corporate governance is an essential component of success for companies, and those firms that apply corporate governance best practices are highly regarded. Additionally, the findings suggest that regulators, policymakers, and standard-setters should raise awareness of the importance of protecting shareholders’ rights by providing seminars and courses for Yemeni media, unions, and professional associations. Moreover, in an environment of uncertainty there is a reluctance to invest and a prevalent tendency to invest in real estate. Furthermore, the results indicate that corporate governance is not practiced by all companies but only to a limited extent by some joint-stock companies. Most of the Yemeni companies that have adopted CG are joint-stock companies, so investors prefer to invest in these companies. The findings of this study provide valuable insights for regulators, practitioners, and academicians. We recommend that this survey be extended to a larger sample, including supervisory managers of companies. This study provides an insightful contribution, because it clarifies the importance of corporate governance for Yemeni investors and investee companies.

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Corporate governance and R&D investment: does firm size matter?

Cited by 19 publications

References 31 publications

Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Does supply chain concentration promote or inhibit corporate R&D investment?

Examining the Impact of Corporate Governance on Investors and Investee Companies: Evidence from Yemen

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