R&D investment under the influence of board characteristics and performance feedback
| Authors | |
|---|---|
| Year of publication | 2017 |
| Type | Article in Proceedings |
| Conference | Proceedings of the 5th International Conference on Management, Leadership and Governance (ICMLG 2017) |
| MU Faculty or unit | |
| Citation | |
| Field | Management and administrative |
| Keywords | behavioral theory of the firm; performance feedback; R&D; board characteristics |
| Description | Performance feedback process assumed by the behavioral theory of the firm has been studied in numerous studies and its influence on firms’ R&D expenditures has been confirmed. It supposes that a firm pays attention to certain aspiration levels – comprising a firm historical performance and performance of its peers. When this level is not attained, a firm is motivated towards change, which is often translated as an increase in R&D spending. However, performance feedback is clearly not the only one of the possible factors affecting firms’ short term behavior. In this paper, it is argued that board characteristics – notably board size, age of its members and board turnover – and their changes can influence yearly differences in R&D spending as well. This paper studies joint influence of performance feedback process and board characteristics on a sample of large German industrial firms listed on exchange markets. |
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