Title: Disproportional ownership structures and corporate R&D investment: from the investor protection perspective

Authors: Yu Zhou; Hongzhang Zhu; Xinyu Hu; Xiaoxi Chang

Addresses: School of Business, Renmin University of China, 59 Zhongguancun St., Haidian District, Beijing 100872, China ' School of Business, Renmin University of China, 59 Zhongguancun St., Haidian District, Beijing 100872, China ' School of Business, Renmin University of China, 59 Zhongguancun St., Haidian District, Beijing 100872, China ' School of Business, China University of Political Science and Law, No. 25 Xitucheng Road, Haidian District, Beijing 100872, China

Abstract: Disproportional ownership structures are promised to stimulate innovation. However, very few studies have empirically examined this relationship and compared the dual-class equity structure and stock pyramid structure, two forms of disproportional ownership structures. In this research, from the investor protection perspective by integrating 'contract' and 'legal' perspectives, we explored the impact of disproportional ownership structures on firms' R&D. Using data consisting of Chinese firms with disproportional ownership structures from 2008 to 2018, we found that compared with pyramidal firms, dual-class firms engaged in more R&D investments. We also found that ownership-control rights divergence negatively moderated the dual-class equity structure and R&D investment relationship, while equity restriction further weakened this moderating effect.

Keywords: ownership structure; dual-class equity structure; ownership-control rights divergence; R&D investment; investor protection.

DOI: 10.1504/IJTM.2023.129564

International Journal of Technology Management, 2023 Vol.92 No.4, pp.288 - 307

Received: 20 Jan 2021
Received in revised form: 28 Feb 2022
Accepted: 23 Apr 2022
Published online: 14 Mar 2023 *

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