Resumen de Corporate governance practices and companies� R&D intensity: : Evidence from European countries

Florence Honoré, Federico Munari, Bruno van Pottelsberghe de La Potterie

• This paper empirically investigates whether corporate governance practices implemented to align shareholders� and managers� interests affect the resources firms devote to R&D. Two databases � one on governance ratings and one on R&D investment � are merged to obtain a multi-country, multi-sector sample of 177 European companies involved in R&D activities. The results suggest that limitations of anti-takeover devices and voting rights restrictions, a financial performance-based remuneration system for managers and a higher shareholders� consensus at the annual general assembly are all negatively correlated with R&D intensity. In other words, governance practices that are designed to respond to the short-term expectations of financial markets might prove to be detrimental to long-term R&D investments.