Ownership structure and R&D: an empirical analysis of Italian listed companies

The objective of this study is to explore the relationship between Research and Development outlays (R&D) and firm ownership structure for public corporations listed on the Italian exchange. Using a sample of 369 firm-year observations over the period 2005-2013 and estimating with the Fixed-Effects model and then a dynamic panel data system-GMM estimator, we empirically investigate the relationship between R&D outlays and ownership structure, taking into consideration various indicator, such as ownership concentration, board ownership, and institutional investors. Our findings are of interest because they reveal a negative relationship between R&D outlays and ownership concentration. Furthermore, we find a positive relationship between R&D investments and institutional investors and a positive relationship between R&D outlays on the one hand and both firm size and firm age on the other hand. Moreover, we find a negative relationship between R&D outlays and the debt-to-capital ratio.