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The Ownership Concentration − Innovation Nexus: Evidence From SMEs Around The World

Year: 2021

Type: article

Abstract: This study investigates whether ownership concentration improves or impedes firm innovation using a sample of small and medium-sized enterprises (SMEs) spanning 95 countries worldwide. We find that higher ownership concentration is associated with a lower likelihood of introducing innovative activities. Further, results reveal that concentrated ownership has detrimental impacts on innovation for firms with a higher degree of asymmetric information and firms led by less experienced managers. We also show that the negative association between ownership concentration and innovation only exists for financially constrained firms (i.e. younger enterprises and SMEs with high financing obstacles) and those with the highly concentrated ownership structure. Lastly, evidence suggests that institutional development alleviates the negative impact of ownership concentration on innovation.

Source: Emerging Markets Finance and Trade

DOI: 10.1080/1540496x.2020.1870954

Authors: Duc Nguyen Nguyen, Quynh-Nhu Tran, Quang-Thai Truong

Institutions: Dalat University, National Yang Ming Chiao Tung University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

OpenAlex ID: W3120189947

FWCI: 11.75

Cites: 94

Cited by: 37

Related to: 10