OWNERSHIP STRUCTURE, AUDIT QUALITY & FIRM INNOVATION: EVIDENCE FORM PAKISTAN
Keywords:
Ownership Structure, Concentrated Ownership, Restricted Ownership, Institutional Ownership, R&D, Audit QualityAbstract
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.
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