The Impact of Family Involvement on the R&D Intensity of Publicly Traded Firms

• Published in: Family business review Vol. 24; no. 1; pp. 62 - 70
• Main Authors: Muñoz-Bullón, Fernando, Sanchez-Bueno, Maria J.
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01-03-2011
• Subjects: family firms; control; ownership; R&D intensity
• ISSN: 0894-4865; 1741-6248
• DOI: 10.1177/0894486510396870

This study examines the impact of family involvement in ownership and control on firms’ R&D intensity, relying on panel data on publicly held firms in Canada over the 2004 to 2009 time period. The literature on the link between family firms and R&D is unclear: although some characteristics may promote R&D intensity in family firms, others factors may have a negative effect. Thus, the authors propose a theoretical framework whereby differences in R&D intensity between family and nonfamily firms are explained based on key conditions, including time horizon, agency costs, resource endowment, or risk-taking behavior. The findings of this study show that publicly traded family firms in Canada record lower R&D intensity compared with nonfamily firms and, therefore, support one side of the previous literature over the other.