Ownership Concentration and R&D Investments? Variations Brought by Family Control in Taiwan

• Main Authors: Irene, Wei Kiong Ting, Kweh, Qian Long, Lo, Huai-Chun
• Format: Conference or Workshop Item
• Language: English
• Published: Universiti Malaysia Pahang 2017
• Subjects: HD28 Management. Industrial Management
• Online Access: http://umpir.ump.edu.my/id/eprint/17608/1/6.%20Ownership%20concentration%20and%20R%26D%20investments%20%28%20%20%29%20%20Variations%20brought%20by%20family%20control%20in%20taiwan.pdf; http://umpir.ump.edu.my/id/eprint/17608/; http://fgic.ump.edu.my/images/docman/1st-FGIC-Proceedings.pdf

This study finds that ownership concentration has a positive impact on R&D investments up to a critical point, after which the impact is reversed. Further, the study indicates that family control has a moderating effect on the nonlinear relationship between ownership concentration and R&D investments. More specifically, family-controlled firms are influenced by ownership concentration to a lower extent than non-family controlled firms. Consistent with most prior studies, this study shows that shareholders of a family-controlled firm are involved in the long-term decisions of the firm, and may thus invest in R&D innovation to seek long-term profit maximization in certain situations.