Control right paradox, compensations of control right cost and R&D investment

Abstract

Abstract: Considering the perspective of Private Benefits of Control(PBC) Paradox, this paper has studied the effects and mechanism of the decisions on R&D investment of High and New Technology Enterprises presided by controlling shareholder with inner benefits motivation. We argue that, firstly, the level of PBC and R&D investment expenditure and intension mainly shows an inversed-U shape tendency. Secondly, there exists difference effects among different kinds of PBC. A positive incentive marginal effect of moderate PBC on R&D investment expenditure and intension is remarkably suggested in empirical tests following marginal decrease rule. Then, the same positive effect of excessive PBC on R&D investment expenditure is found, but excessive PBC does not show any effect on R&D investment intension. Moreover, the positive effect of low PBC on R&D investment expenditure and intension is very weak, and this suggests there is not any incentive effect on controlling shareholders. Lastly, there are not any interesting evidences if the ownership of actual controlling shareholders is involved in the empirical tests mentioned before.

Key words: controlling shareholder, moderate control benefits, R&D investment intension, R&D investment expenditure

CLC Number:

Ran Rong, Wang Ding, Xie Yi. Control right paradox, compensations of control right cost and R&D investment[J]. Science Research Management, 2015, 36(8): 86-95.

References

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