Study reveals that state equity ownership increases R&D spending in companies
An unprecedented study on the relationship between state equity ownership and research and development (R&D) spending in companies was presented during the international “Strategic Management Society Special Conference - Collaborative Strategies: New thinking about Alliances, Mergers, and Acquisitions”, held in Costa Rica. Titled “State equity ownership and the use of R&D resources”, the work is the fruit of research by PhD Candidate Rodrigo Gandara Donini of FGV’s Brazilian School of Public and Business Administration (EBAPE).
The paper was presented during the session “The impact of affiliation and ownership on innovation” and is the result of dynamic panel models using a database of 5,043 companies from 63 countries and 67 sectors, between the years 2010 and 2016. The study’s results indicate that state equity ownership is positively associated with R&D spending in companies. An increase of 1% in state equity ownership is related to an increase of USD 1.555 million in R&D spending.
These results have implications for state-owned institutions (e.g. in the sense of providing more information for public managers to make policies encouraging more efficient innovation), and also implications for the companies, by providing more information for managers to determine the most efficient way to implement innovative projects.
The study is available in English at FGV’s Digital Library.