Title: R&D spending and small-cap performance: moderating role of ownership concentration

Authors: Manali Chatterjee; Titas Bhattacharjee

Addresses: Rajendra Mishra School of Engineering Entrepreneurship, Indian Institute of Technology, Kharagpur, India ' Rajendra Mishra School of Engineering Entrepreneurship, Indian Institute of Technology, Kharagpur, India

Abstract: Drawing from the 'value creation' perspective of corporate governance, this study explores on investors' perception of value creation approach and whether it holds across all the institutional contexts even where value protection may be of utmost importance due to lower investor protection framework and significant presence of concentrated ownership across the firms. Cross-sectional data of 134 R&D-based Indian small-cap firms have been employed to probe the hypotheses. This study finds that the individual influence of both promoters' holding and R&D intensity is positive yet insignificant on stock market performances. However, market performance improves significantly when both ownership concentration and R&D intensity are present.

Keywords: promoters' holding; ownership concentration; small cap; R&D spending; emerging market.

DOI: 10.1504/IJBEM.2020.111724

International Journal of Business and Emerging Markets, 2020 Vol.12 No.4, pp.359 - 376

Received: 20 Nov 2019
Accepted: 16 Mar 2020
Published online: 11 Dec 2020 *

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