Ownership structure and investments in R&D: An analysis in Brazil’s public companies

Abstract

Based on precepts of the Agency Theory, the study has the general purpose of analyzing the relationship between ownership structure and investments in R&D in public companies in Brazil. For this purpose, the data of 66 public companies in Brazil referring to the period 2009-2012 were analyzed through the Multiple Correspondence Analysis (MCA) and Multiple Linear Regression with use of panel data. Through the MCA, the study examined the relationship between ownership structure – ownership concentration and identity of the controlling shareholder – and investments in R&D. Among the findings, it should be noted that companies under foreign or family control show high ownership concentration and have high investments in R&D. Regarding the Multiple Linear Regression with use of panel data, it has been found that ownership concentration was not a factor that influenced investments in R&D. Concerning the identity of the controlling shareholder, it was observed that the presence of a foreign or state controlling shareholder has no effect on investments in R&D. Complementarily, the study found empirical evidence of the effects of specific characteristics of firms such as size and the information technology sector as attributes that may, in fact, influence the investments in R&D. In this sense, it can be concluded that there is a relationship between ownership structure and investments in R&D. The study enables researchers and professionals to realize that the decisions of managers, with regard to investments in R&D, can be influenced by different arrangements of the ownership structure in emerging markets.

Keywords: Agency Theory, ownership structure, investments in Research and Development.