Adnan Khan, Naveed ., Zahid Ali


Ownership structure is a key element of directing the firm and taking strategic decisions. Separation of ownership and control brings principal- agent conflicts in organizations. Ownership structure is considered as the most powerful remedy to agency problems in firms. R&D investment being the critical and risky decision, gained the attention of researchers. The objective of this study is to determine the association between ownership structure and R&D investment. All non-financial firms listed in Pakistan stock exchange covering data from 2005 to 2018 is the sample of research. Fixed effect model is used based on husman’s test result for analysis. In addition to the ownership structure, the audit quality is taken a moderator in the relationship of ownership structure and R&D. The results of the study suggest that concentrated ownership has a significant positive, restricted ownership has a negative impact on R&D impact. While the relationship between institutional ownership and R&D could not be established. Furthermore, the audit quality had no significant moderating effect in the relationship.


Ownership Structure, Concentrated Ownership, Restricted Ownership, Institutional Ownership, R&D, Audit Quality

Full Text:



Aghion, P., Van Reenen, J., & Zingales, L. (2013). Innovation and institutional ownership. American economic review, 103(1), 277-304.

Al-Matari, E. M., & Al-Hebry, A. A. (2019). The Impact of Government, Foreign and Institutional Ownership and Firm Performance on Audit Quality Using Regression Analysis. Industrial Engineering & Management Systems, 18(3), 395-406.

Al-Matari, E. M., Al-Matari, Y. A., & Saif, S. A. (2017). Ownership structure, audit quality and firm performance moderating and direct-effect models: An empirical study. Corporate Board: Role, Duties and Composition, 13(1), 28-35.

Alshammari, S. (2014). Corporate governance and audit quality: the case of Kuwait. Bond University.

Alzeaideen, K. A., & Al, S. Z. (2018). The effect of ownership structure and corporate debt on audit quality: Evidence from Jordan. International Journal of Economics and Financial Issues, 8(3), 51.

Berrone, P. A., Surroca Aguilar, J., & Tribo Gine, J. A. (2005). The influence of blockholders on R and D investments intensity: evidence from Spain.

Chou, T., & Johennesse, L. (2021). Board characteristics, ownership structures and firm R&D intensity. Accounting, 7(3), 635-644.

Driver, C., & Guedes, M. J. C. (2012). Research and development, cash flow, agency and governance: UK large companies. Research Policy, 41(9), 1565-1577.

Farwis, M., & Azeez, A. (2019). Corporate Ownership Structure and Firm Risk: Empirical Evidence from Listed Companies in Sri Lanka. Journal of Finance and Bank Management, 7(2), 72-81.

James, B. E., & McGuire, J. B. (2016). Transactional-institutional fit: Corporate governance of R&D investment in different institutional contexts. Journal of Business Research, 69(9), 3478-3486.

Lopez Iturriaga, F. J., & López‐Millán, E. J. (2017). Institutional framework, corporate ownership structure, and R&D investment: an international analysis. R&D Management, 47(1), 141-157.

Migliori, S., De Massis, A., Maturo, F., & Paolone, F. (2020). How does family management affect innovation investment propensity? The key role of innovation impulses. Journal of Business Research, 113, 243-256.

Minetti, R., Murro, P., & Paiella, M. (2015). Ownership structure, governance, and innovation. European Economic Review, 80, 165-193.

Munari, F., Oriani, R., & Sobrero, M. (2010). The effects of owner identity and external governance systems on R&D investments: A study of Western European firms. Research Policy, 39(8), 1093-1104.

Paniagua, J., Rivelles, R., & Sapena, J. (2018). Corporate governance and financial performance: The role of ownership and board structure. Journal of Business Research, 89, 229-234.

Rapp, M. S., & Udoieva, I. A. (2017). Corporate governance and its impact on R&D investment in emerging markets. Emerging Markets Finance and Trade, 53(10), 2159-2178.

Rubio-Misas, M. (2020). Ownership structure and financial stability: Evidence from Takaful and conventional insurance firms. Pacific-Basin Finance Journal, 62, 101355.

Sing, T. F., & Sirmans, C. (2008). Does real estate ownership matter in corporate governance? Journal of property research, 25(1), 23-43.

Soewarno, N., & Ramadhan, A. (2020). The effect of ownership structure and intellectual capital on firm value with firm performance as an intervening variable. International Journal of Innovation, Creativity and Change, 10(12), 215-236.

Sun, C., Q. Long. (2020). An empirical study on the influence of ownership concentration on enterprise R&D investment. Review of Industrial Economics, 1, 120-132.

Wan, W., Zhou, F., Liu, L., Fang, L., & Chen, X. (2021). Ownership structure and R&D: The role of regional governance environment. International Review of Economics & Finance, 72, 45-58.


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
Sarhad Journal of Management Sciences by Sarhad University of Science & Information Technology is licensed under a Creative Commons Attribution 4.0 International License.
Based on a work at suit.edu.pk