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Board reforms and innovation

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  • Ahmad, Muhammad Farooq
  • Aziz, Saqib
  • Dowling, Michael
  • Kowalewski, Oskar

Abstract

We study the effect of board reforms on firms' research and development (R&D) investments utilizing a sample of 41 countries. Using a difference-in-differences analysis, we find that firms invest more in R&D following corporate governance reforms. Of these, two legal reforms — having an independent audit committee and board independence — have a greater impact on R&D investment. Additionally, we show that board reforms have a more pronounced effect on R&D investment in hi-tech industries and the health sector.

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  • Ahmad, Muhammad Farooq & Aziz, Saqib & Dowling, Michael & Kowalewski, Oskar, 2023. "Board reforms and innovation," International Review of Financial Analysis, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:finana:v:88:y:2023:i:c:s1057521923002235
    DOI: 10.1016/j.irfa.2023.102707
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    Cited by:

    1. Li, Weibin & Huang, Yingling & Zhou, Hongyong & Liu, Xin, 2024. "CEO power, internal control quality, and entrepreneurial innovation spirit in family enterprises," International Review of Financial Analysis, Elsevier, vol. 95(PA).

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    More about this item

    Keywords

    Corporate governance; Board reforms; Corporate law; Innovation; Research and development;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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