Ownership structure and innovation: Is there a real link?

This study examines the relationship between the ownership and control structures of a company and its innovative activity. It seeks to analyse the effect of the internal features of a company’s ownership structure on decisions to initiate research and development activities and on the actual output of this innovative process. Specifically, we examine company ownership, the distribution of decision-making powers, the nature of these powers and the extent to which ownership is concentrated, among others. The analysis is performed on a representative sample of Spanish manufacturing industries for the year 2001. Our results are consistent with the hypothesis that internal factors are significant for the undertaking of R&D activities. In particular, we report that a high degree of ownership concentration and the use of debt financing serve to dissuade a firm from incurring R&D expenditure and do not favour R&D output.