A comparison of ownership structures and innovations of US and Japanese firms

Abstract

This study analyzes the impact of ownership structure on innovation in the US and Japan. Agency theory is used to develop links between the distinct patterns of ownership in the US and Japan to differences in innovation. Empirical evidence shows that ownership concentration and the identity of the investors with large ownership positions affects innovation. This relationship differs across the two countries. Copyright © 2005 John Wiley & Sons, Ltd.

Corporate Governance and Innovation: A Survey

“…They argue that this in turn may lead to resource misallocation and may negatively affect innovation rates both at a firm level and at an aggregate level. Within the agency theory, finally, a nonlinear relationship between ownership concentration and innovation is suggested by Lee (2005), who analyses the impact of ownership structure on innovation using data on 1044 US firms and 270 Japanese firms for the year 1995. In particular, Lee (2005) maintains that the principal–agent relationship in modern corporations varies by country, depending on the national characteristics of corporate governance and culture.…”

“…Within the agency theory, finally, a nonlinear relationship between ownership concentration and innovation is suggested by Lee (2005), who analyses the impact of ownership structure on innovation using data on 1044 US firms and 270 Japanese firms for the year 1995. In particular, Lee (2005) maintains that the principal–agent relationship in modern corporations varies by country, depending on the national characteristics of corporate governance and culture. His results, indeed, show that for the USA, at low levels of R&D investment, stock concentration is negatively related to the number of patents granted, and positively related to innovations at high levels.…”

“…This result is argued by the authors to be due to the fact that mutual funds concern themselves only with short‐term results, while pension funds have long‐term interests. Contrastingly, Lee (2005) finds a positive effect of bank ownership on innovation, using data on corporate owner's identity and patents granted for 270 Japanese firms observed in 1995.…”

Corporate governance practices and companies’ R&D intensity: Evidence from European countries

“…In addition, the paper does not assess the impact of R&D investments on productivity. Further research could, therefore, adopt alternative measures based on output measures, such as citationweighted patents (Lee, 2005), new product introductions (Kochhar and David, 1996) or corporate entrepreneurship (Zahra, 1996). In addition, the empirical exercise is limited to large, publicly listed companies and it might not be valid for other types of firms.…”

A descriptive longitudinal analysis of the ownership structure of Spanish innovative companies

“…In some countries, such as Germany, Spain, Japan and Sweden, banks are one of the most relevant companies' shareholders. They act as guarantors of innovation investments (Miozzo and Dewick, 2002), which support the positive association between banks ownership and R&D investment, long-term commitments, and innovation (Lee, 2005;Miozzo and Dewick, 2002). However, literature is not always consistent regarding the effects of financial owners on R&D and innovation.…”