TY  - JOUR
AU  - Belenzon,Sharon
AU  - Berkovitz,Tomer
AU  - Bolton,Patrick
TI  - Intracompany Governance and Innovation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15304
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15304
L1  - http://www.nber.org/papers/w15304.pdf
N1  - Author contact info:
Sharon Belenzon
Duke University
Fuqua School of Business
1 Towerview Drive, Durham, NC
United States
E-Mail: sharon.belenzon@duke.edu

Tomer Berkovitz
Columbia University
Graduate School of Business
New York, NY  10027
E-Mail: tb2122@columbia.edu

Patrick Bolton
Columbia Business School
804 Uris Hall
New York, NY 10027
Tel: 212/854-9245
Fax: 212/854-8059
E-Mail: pb2208@columbia.edu
AB  - This paper examines the relation between ownership, corporate form, and innovation for a cross-section of private and publicly traded innovating firms in the US and 15 European countries. A striking novel observation emerges from our analysis: while most innovating firms in the US are publicly traded conglomerates, a substantial fraction of innovation is concentrated in private firms and in business groups in continental European countries. We find virtually no variation across US industries in the corporate form of innovating firms, but a substantial variation across industries in continental European countries, where business groups tend to be concentrated in industries with a slower and more fundamental innovation cycle and where intellectual protection of innovators seems to be of paramount importance. Our findings suggest that innovative companies choose the corporate form most conducive to R&D, as predicted by the Coasian view of how firms form. This is especially true in Europe, where there are fewer regulatory hurdles to the formation of business groups and hybrid corporate forms. It is less the case in the US, where conglomerates are generally favored.
ER  -