Capital Control, Debt Financing and Innovative Activity

The present paper first discusses theoretically the different incentives of manager- versus owner-controlled firms for investment into innovative activity. In addition, the role of debt financing is analyzed. Subsequently the results from an empirical study on the determinants of innovative activity measured by patent applications are presented. A sample of German firms covering 2,793 observations is used, and it turns out that companies with widely held capital stock are more active in innovation, i.e. weakly controlled managers show a higher innovation propensity. However, the higher the leverage the more disciplined the managers are.

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Year of publication:	2004
Authors:	Czarnitzki, Dirk ; Kraft, Kornelius
Publisher:	Mannheim : Zentrum für Europäische Wirtschaftsforschung (ZEW)
Subject:	Innovation \| Betriebliche Investitionspolitik \| Eigentümerstruktur \| Fremdkapital \| Patent \| Schätzung \| Corporate Governance \| Deutschland \| Patents \| Limited Dependent Variables

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Series:	ZEW Discussion Papers ; 04-75
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	470222530 [GVK] hdl:10419/24081 [Handle] RePEc:zbw:zewdip:2362 [RePEc]
Classification:	O31 - Innovation and Invention: Processes and Incentives ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; O32 - Management of Technological Innovation and R&D ; C25 - Discrete Regression and Qualitative Choice Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10010297397