Ownership as R&D incentive in business groups

Ownership as R&D incentive in business groups Small and medium-sized enterprises (SMEs) are supposed to be less likely to conduct formal R&D because of the lack of financial resources, weaker competencies, and the absence of scale and scope economies. These limitations may be overcome when an SME belongs to a business group. Empirical studies have shown that firms belonging to business groups have a higher propensity to engage in R&D. We demonstrate that this higher propensity depends on the ownership of controlled companies, besides the presence of coordination mechanisms. We develop a model, and we empirically test its predictions using a data set of Italian SMEs operating in the manufacturing sector. From the model we derive three main implications: (1) there is no difference in R&D propensity between standalone firms and firms at the bottom of groups; (2) head and intermediate firms have a higher R&D propensity than standalone firms and firms at the bottom of the group; (3) the intensity of R&D depends on the ownership of controlled firms and on their size. Overall, the results of the empirical analysis are in accordance with the implications of the model. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Ownership as R&D incentive in business groups

Loading next page...
Springer US
Copyright © 2013 by Springer Science+Business Media New York
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial