Template-type: ReDIF-Paper 1.0
Author-Name: Bernardo Bortolotti
Author-Name: Veljko Fotak
Author-Name: Brian Wolfe
Title: Government Share Ownership and Innovation: Evidence from European Listed Firms
Abstract: We investigate the impact of government ownership on the innovativeness of European listed firms. We find that firms with minority government stakes invest more in research and development (R&D) than private firms, thanks to relaxed financial constraints. However, firms with majority government stakes invest less due to short-term political priorities distorting managerial objectives and incentives. Our results are robust to propensity score matching and instrumental variables to account for omitted variable bias and the endogenous nature of government ownership. On the output side, despite the higher investment in R&D, minority government ownership has no discernable impact on patent quantity and quality, as measured by citations. Our results indicate that government ownership is not an efficient policy to promote innovation in listed firms.
Classification-JEL:G32, G15, G38
Keywords: Innovation, R&D, state ownership
Length: 62 pages 
Number: 1872
Creation-Date: 2018
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp1872.pdf
File-Format: application/pdf
File-Size: 808
Handle: RePEc:baf:cbafwp:cbafwp1872