Abstract
The comprehension and the explanation of the research and development (R&D) investment behaviour are done within the framework of a reflection on corporate governance. This investment does not contribute to creating value only if it is framed by governance mechanisms which role is to keep organizational, agency, or transaction costs as low as possible. In this context, we try to determine whether an integrating model exists; one that measures the simultaneous effect of the characteristics of the board of directors on R&D and the firm performance in an international context. Our model seeks to identify whether the dominance of inside directors and the dual structure influence the level of R&D investment, the mediating variable, and hence the firm performance. Our empirical study was carried out on a total sample of 509 firms divided between 165 American firms, 173 Japanese firms, and 171 French firms over the period 2014 to 2019. The findings of the mediation analysis according to the approach of Preacher and Hayes (2004, 2008) show the significant role of mediation by R&D investment between, on the one hand, the dominance of inside directors and duality, and on the other hand, the firm performance. Differences in the configuration of board of directors (BD) in different countries thus lead to different attitudes to the fulfillment of the control task and the R&D investment decision, value creator
Highlights
The majority of the works with financial theoretical bases try to grant an important role to the board of directors as an internal mechanism of governance limiting the opportunist behaviour of the managers and to study its role and its attributes in the achievement of the performance.Seldom the studies which examined the indirect relation between the BD, which markedly differs according to the type of the national systems of governance, and the firm performance through the level of investment in research and development, except for the works of Zouari and Zouari-Hadiji (2014a, 2014b).a firm’s ability to invest in R&D is considered one of the determinants of its performance (Yoo & Sung 2015; Zouari & Abdelmalek, 2020)
This section is intended to present the results of the test of the two hypotheses that connect the BD apprehended by the dominance of inside and dual structure with the firm performance through the R&D investment level
Assessing the hypotheses of the model “dominance of inside directors/R&D investment/ firm performance”. The purpose of this hypothesis is to test the mediating role of the R&D investment level variable (R&D) in the relationship between the dominance of inside directors (INSIDE.DIR) and the firm performance (ROA and MTB)
Summary
The majority of the works with financial theoretical bases try to grant an important role to the board of directors ( referred as BD) as an internal mechanism of governance limiting the opportunist behaviour of the managers and to study its role and its attributes in the achievement of the performance.Seldom the studies which examined the indirect relation between the BD, which markedly differs according to the type of the national systems of governance, and the firm performance through the level of investment in research and development ( referred as R&D), except for the works of Zouari and Zouari-Hadiji (2014a, 2014b).a firm’s ability to invest in R&D is considered one of the determinants of its performance (Yoo & Sung 2015; Zouari & Abdelmalek, 2020). Seldom the studies which examined the indirect relation between the BD, which markedly differs according to the type of the national systems of governance, and the firm performance through the level of investment in research and development ( referred as R&D), except for the works of Zouari and Zouari-Hadiji (2014a, 2014b). R&D investment, apart from its characteristics, theoretically leads to an increase in conflicts of interest and agency costs compared to other types of investments. It can without any effective control over the managers, strengthen managerial latitude
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