Agency theory and the context for R&D investment: Evidence from Korea

Taeyoung Yoo, Mooweon Rhee

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Pitting the theoretical assumptions of agency theory against the characteristic governance mechanisms of a state-coordinated market economy, this study examines the effects of financial structure, ownership formation and ownership identity on corporate R&D investment. Using panel data on 100 large listed Korean firms, the study provides evidence that market-based governance mechanisms facilitate R&D investment. However, the findings also indicate that the idiosyncratic organizational characteristics of a society, such as business-group affiliation and state ownership in Korea, are not active in dividend payout and are positively related to R&D investment. This suggests that strategic management of changes in corporate governance requires contextual understanding of the two contrasting governance rationales.

Original languageEnglish
Pages (from-to)227-252
Number of pages26
JournalAsian Business and Management
Volume12
Issue number2
DOIs
Publication statusPublished - 2013 Apr 1

Fingerprint

Korea
governance
evidence
ownership structure
strategic management
corporate governance
market economy
firm
market
Agency theory
Group
Governance mechanisms
Ownership
Society
Business groups
Financial structure
Governance
Management of change
Rationale
Dividend payout

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Sociology and Political Science
  • Political Science and International Relations
  • Strategy and Management

Cite this

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Agency theory and the context for R&D investment : Evidence from Korea. / Yoo, Taeyoung; Rhee, Mooweon.

In: Asian Business and Management, Vol. 12, No. 2, 01.04.2013, p. 227-252.

Research output: Contribution to journalArticle

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