Investments in R&D can influence a firm's ability to develop new products and to create and adopt innovative technologies that may enhance productivity. However, due to uncertainty regarding the outcome, investments in R&D may lead to an agency problem between the owners and the managers of a firm. Family and founder firms are often considered to be different in their agency situation than other firms, which may have an influence on R&D investments. This paper analyzes R&D spending in family and founder firms versus other firms. The results show that while family ownership decreases the level of R&D intensity, ownership by lone founders has a positive effect not only on R&D intensity but also on the level of R&D productivity. The paper contributes to the understanding of the role of entrepreneurship in making high risk/high return R&D decisions.

Agency theory, Entrepreneurial orientation, Family firms, Lone founder firms, Monitoring, R&D productivity, R&D spending
dx.doi.org/10.1016/j.jbusvent.2010.09.003, hdl.handle.net/1765/22105
Journal of Business Venturing: entrepreneurship, entrepreneurial finance, innovation and regional development
Erasmus Research Institute of Management

Block, J.H. (2012). R&D investments in family and founder firms: An agency perspective. Journal of Business Venturing: entrepreneurship, entrepreneurial finance, innovation and regional development, 27(2), 248–265. doi:10.1016/j.jbusvent.2010.09.003