Title: R&D investment, management entrenchment and governance mechanisms: evidence from French listed companies on SFB120 index
Authors: Sana Triki Damak; Khamoussi Halioui
Faculty of Economic Sciences and Management of Sfax, University of Sfax, Airport Road Km 4, BP 1088, 3018, Sfax, Tunisia
College of Economics and Administrative Sciences, Al-Imam Muhammad Ibn Saud Islamic University at Riyadh, Kingdom of Saudi Arabia
Abstract: The aim of this paper is to investigate the effects of management entrenchment on research and development business decisions in the French listed companies and to detect these effects when we test simultaneously the impact of the board of directors' characteristics and the external audit quality. Using data from the French listed companies on the SBF 120 index during the period 2003-2011, this paper statistically tests the hypotheses on the relationship between corporate R&D intensity and managers' entrenchment indicators associated with two types of corporate governance mechanisms: the board of directors' characteristics and the external audit quality. Our results show that R&D intensity is affected by most of management entrenchment indicators (the age, the career, the stock ownership, the education and the firm's past performance), the external audit quality and some control variables (the size and the industry).
Keywords: R&D investment; research and development; corporate governance; governance mechanisms; management entrenchment; board of directors; external audit quality; France.
Int. J. of Accounting and Finance, 2016 Vol.6, No.3, pp.197 - 218
Date of acceptance: 17 Aug 2016
Available online: 18 Jan 2017