Research On The Influence Of Ownership Concentration On R&D Investment

Technological innovation is the source of economical development and the key ofimproving competitiveness in a company. As a primary way of technological innovation,research and development (R&D) is the basic assurance to acquire long-term advantage inthe fierce competition. The scholars have discussed the relationship between ownershipconcentration and R&D investment a lot, but have not reached the same result. Will therelationship between ownership concentration and R&D investment change if underdifferent ownership type? If the ownership concentration has a negative effect on the R&Dinvestment, is there an effective method to reduce it?This paper discusses the relationship between ownership concentration and R&Dinvestment from the angle of private enterprises. We first analyze the influence ofownership concentration on R&D investment according to Agency Theory, and use thedata of private listed enterprises which publicize R&D expenditure from2008to2010toexplore the relationship between ownership concentration and R&D investment in privatelisted enterprises. The empirical result shows that as the ownership concentration increases,the R&D investment first declines, then increases. For the ownership concentration has anegative effect on the R&D investment in certain circumstances, the paper introduces theownership restriction and legal environment to discuss if the negative effect will reduceunder different degree of ownership restriction and legal environment. The result showsthat high degree of ownership restriction and favorable legal environment helps to reducethe negative effect of ownership concentration on R&D investment. This paper narrows theresearch object of the study on the relationship between ownership concentration and R&Dinvestment, and discusses ownership restriction’s adjustment effect on the influence ofownership concentration on R&D investment from a brand-new angle. Besides, this paper considers the impact of legal environment, which is a supplement to the literatureavailable.