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Market concentration, corporate governance and innovation: partial and combined effects in US-listed firms

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  • Ugur, Mehmet
  • Hashem, Nawar

Abstract

Mehmet Ugur and Nawar Hashem aim to contribute to the debate by investigating both partial and combined effects of corporate governance and market concentration on innovation. Utilising a dataset for 1,400 non-financial US-listed companies and two-way cluster-robust estimation methodology, they report several findings. First, the relationship between market concentration and innovation is non-linear. Secondly, the relationship has a U-shape in the case of input measure of innovation (research and development - R&D – expenditures); but it has an inverted-U shape when net book-value of brands and patents is used as output measure of innovation. Third, corporate governance indicators such as antitakeover defences and insider control tend to have a negative partial effect on R&D expenditures but a positive partial effect on net book-value of brands and patents. Finally, when interacted with market concentration, anti-takeover defences and insider control act as complements to market concentration.

Suggested Citation

  • Ugur, Mehmet & Hashem, Nawar, 2012. "Market concentration, corporate governance and innovation: partial and combined effects in US-listed firms," Greenwich Papers in Political Economy 8840, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:8840
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    References listed on IDEAS

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    More about this item

    Keywords

    innovation; competition; corporate governance; two-way cluster-robust estimation;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G3 - Financial Economics - - Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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