Effects of Profitability and Liquidity on R&amp;D Intensity: Japanese and U.S. Companies Compared

Hundley, Greg; Jacobson, Carol K.; Park, Seung Ho

doi:10.5465/257073

Cited by 34 publications

(44 citation statements)

References 15 publications

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“…Given their status and the nature of the market, banks are long-term investors in the majority of firms in these financial systems (McGuire and Dow, 2003). Bank controlled firms, for example, are more willing to invest in R&D, even while the firm is performing poorly, reflecting the long time horizon of these investors (Hundley et al, 1996). However, even in bank based financial systems, some institutional investors can have short-term time horizons.…”

Section: Bank-centred Financial System Researchmentioning

confidence: 99%

Institutional Investors and Institutional Environment: A Comparative Analysis and Review

Johnson

Schnatterly

Johnson

et al. 2010

J Management Studies

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We provide a review of the literature surrounding institutional investor classifications, and we extend this research by examining the aforementioned classification systems and relate this to the three predominant financial systems (market-based, family-centred, and bank-centred systems). After integrating this literature we propose that future research can contribute to the corporate governance field in three main ways: through improved measurement of the central constructs, through more complex research designs (through moderated and/or longitudinal relationships), and through asking new types of questions. We suggest several questions and approaches for future research on institutional investors and their interrelationship with country financial systems. Copyright (c) 2010 The Authors. Journal of Management Studies (c) 2010 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

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Section: Bank-centred Financial System Researchmentioning

confidence: 99%

Institutional Investors and Institutional Environment: A Comparative Analysis and Review

Johnson

Schnatterly

Johnson

et al. 2010

J Management Studies

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show abstract

“…Q is computed as the ratio of market value (sum of market value of equity, book value of preferred stock, and book value of debt) to total assets (Chung and Pruitt, 1994). Several control variables that affect strategic investments were also included: cash flow (Fazzari, Hubbard, and Peterson, 1988), major domestic owners (Lee and O'Neill, 2003), return on assets (Hundley, Jacobson, and Park, 1996), debt to total assets (Lang et al, 1996), and firm size. Cash flow is computed as sales less cost of goods sold, selling, general, and administrative expenditure, taxes, interest, and dividend paid as a ratio of total assets (Fazzari et al, 1988).…”

Section: Variablesmentioning

confidence: 99%

Strategic investments in Japanese corporations: do foreign portfolio owners foster underinvestment or appropriate investment?

et al. 2006

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This paper investigates the effect of foreign ownership on strategic investments in Japanese corporations. Foreign owners are typically portfolio investors who frequently buy and sell shares and hold diversified portfolios of small stakes in many firms. Prior research has presented two conflicting perspectives on the role of such investors: (a) their frequent trading leads to pressure for short-term returns that fosters underinvestment; (b) their active trading fosters appropriate investments. We investigated the relationship between foreign ownership and strategic investments using dynamic panel data analysis of a sample of 146 Japanese manufacturing firms from 1991 to 1997. We found that foreign ownership enhances strategic investments (in R&D and capital intensity) to a greater extent when firms have growth opportunities than when they lack such opportunities. We conclude that foreign ownership fosters appropriate investment.

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“…In order to avoid high transaction costs, firms may be induced to engage in internal R&D to solve problems related to the transmission of tacit knowledge (Bresman et al, 1999). At the same time, internal developments may be perceived by firms because of the high risk due to the low probability of the innovation success and the length of required time for the innovations to provide adequate returns (Hundley et al, 1996). Thus, firms prefer to invest fewer resources in internal R&D when faced with resource constraints or attractive external innovation sources exist.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Mergers & acquisitions and innovation performance in the telecommunications equipment industry

Gantumur¹,

Stephan²

2011

Industrial and Corporate Change

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Effects of Profitability and Liquidity on R&D Intensity: Japanese and U.S. Companies Compared

Cited by 34 publications

References 15 publications

Institutional Investors and Institutional Environment: A Comparative Analysis and Review

Institutional Investors and Institutional Environment: A Comparative Analysis and Review

Strategic investments in Japanese corporations: do foreign portfolio owners foster underinvestment or appropriate investment?

Mergers & acquisitions and innovation performance in the telecommunications equipment industry

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