Agency theory and the context for R&D investment: Evidence from Korea

Taeyoung Yoo, Mooweon Rhee

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)


Pitting the theoretical assumptions of agency theory against the characteristic governance mechanisms of a state-coordinated market economy, this study examines the effects of financial structure, ownership formation and ownership identity on corporate R&D investment. Using panel data on 100 large listed Korean firms, the study provides evidence that market-based governance mechanisms facilitate R&D investment. However, the findings also indicate that the idiosyncratic organizational characteristics of a society, such as business-group affiliation and state ownership in Korea, are not active in dividend payout and are positively related to R&D investment. This suggests that strategic management of changes in corporate governance requires contextual understanding of the two contrasting governance rationales.

Original languageEnglish
Pages (from-to)227-252
Number of pages26
JournalAsian Business and Management
Issue number2
Publication statusPublished - 2013 Apr

Bibliographical note

Funding Information:
This work was supported by a Hankuk University of Foreign Studies Research Fund of 2012 and by a National Research Foundation of Korea Grant funded by the Korean Government (NRF-2010-330-B00100). We thank Sanghoon Lee for data collection and inputs on the draft.

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Sociology and Political Science
  • Political Science and International Relations
  • Strategy and Management


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