Reexamination of Ownership Structure and R&D Investment in Family Businesses: Evidence from Korean Business Groups

Reexamination of Ownership Structure and R&D Investment in Family Businesses: Evidence and Insights from Korean Business Groups

Abstract

The study reexamines the family ownership and overall firms’ ownership structure on R&D investment, as these vary significantly between companies. Both variables are endogenous, necessitating an analysis that accounts for this endogeneity. The findings indicate that the impact of professional management shareholding on R&D investment is not significant, and vice versa. It reveals a tendency for R&D investment to decrease as the family owner’s shareholding increases, and firms with higher R&D investments tend to have lower owner shareholdings. The passage also notes that empirical research results often conflict, and this study highlights that differences in econometric methods could contribute to these conflicting results.

Keywords:

Key Word: Family Business, Ownership Structure, Family Ownership, R&D Investment, Instrumental variable analysis, Hausman & Taylor IV/GLS

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Author: sungyongchang

Hi! I am Sungyong Chang, an assistant professor of Management and Organizations at Cornell University. My research interests lie in the area of creativity & innovation, and computational social science. You can also find my working papers in my CV, and on my SSRN page and Google Scholar. I graduated from Columbia Business School in May 2018 and earned BA in Business and Economics as a valedictorian from Seoul National University.

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