Investigate the effect of board compensation on R&D expenditure
Year: 2025
Type: article
Abstract: Purpose: An opportunistic managerial approach may lead to the deliberate delay in disclosing bad news, particularly when firm performance is weak. Such behavior is often rationalized within the framework of the firm’s control and ownership structure. This study aims to investigate the impact of environmental uncertainty and family ownership on the relationship between board compensation and R&D expenditure. Methodology: Data on firms listed on the TSE from 2011 to 2021 were collected, and a regression approach was used. Findings: The results indicate that board compensation affects research and development expenditure. Also, the second hypothesis shows that family ownership has a positive and significant effect on the joint engagement of board compensation and research and development expenditure. Finally, environmental uncertainty significantly affects the relationship between board compensation and research and development expenditure. Originality/value: The research findings indicate that both family ownership and environmental uncertainty influence the firm’s investment approach toward research and development (R&D) expenditures. Specifically, family ownership helps constrain managerial opportunism, thereby enhancing firm performance. Conversely, environmental uncertainty—due to earnings fluctuations—tends to reduce R&D spending, as firms seek to mitigate risk under volatile conditions.
Author: Rashidi, Mohsen
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7115094262
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