The Influence of Ownership Structure on the Innovation Activity of South Asian Companies at Different Life Cycle Stages

Аннотация

The lack of understanding management of corporate and financial innovation management in South Asia raises the fear of the declining effects of new technologies. Therefore, it is of practical interest to compare the estimates of the impact of ownership concentration in different innovation-intensive industries to minimize the agency problem among managers and shareholders. The paper provides an econometric analysis using panel regression of model testing on companies from technologically sophisticated industries, such as the Heavy and Light Industry, Information Technology (IT), and Consumer Staples from South Asia in different life cycles stages from 2015 to 2020. The South Asian market is volatile and receptive to innovations, but R&D capacity in some countries remains low. The paper provides a better understanding of the relationship between the concentration of different forms of ownership and the intensity of innovation, using industry
specifics and life cycle stages. It’s known that institutional investors are still interested in developing new digital marketing channels by competing with industry “disruptors” due to the lack of necessary strength in the IT industry along with barriers to cross-border investment. The paper confirms a linear and inverted U-shaped relationship between different forms of ownership structure and innovation activity. The results allow focusing on industrial and cultural differences to avoid agency and resource conflicts for majority shareholders of the company to build effective corporate governance, achieving strategic goals and minimizing the risks of improper management decisions in R&D.