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Abstract

Firms’ innovation activities change over time, yet little is known about how R&D investments, as a critical input to innovation, change with firm age. Moreover, previous studies have documented that ownership, as a fundamental component of corporate governance,influences R&D investments. However, no prior study has ever investigated whether types of ownership affect the age–R&D relationship. Examining R&D investments according to firm age and ultimate ownership casts light on the dynamics of innovation. Based on a sample of publicly listed R&D performing manufacturing firms in China during 2007–2014, this study reveals that R&D investments differ according to firm age. The relationship between firm age and R&D investments is bell-shaped in general. The type of ultimate ownership moderates the age–R&D relationship, as the relationship is more dramatic among SOEs. The findings of this study contribute to ongoing literature on corporate governance and innovation from an emerging economy context.

Item Type:	Article
Authors/Creators:	Fan, S and Wang, Cong
Keywords:	firm age, R&D investment, ultimate ownership
Journal or Publication Title:	International Review of Economics and Finance
Publisher:	Elsevier
ISSN:	1059-0560
DOI / ID Number:	10.1016/j.iref.2019.11.012
Copyright Information:	© 2019 Published by Elsevier Inc.
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