Armando Rungi (IMT Lucca)
11 December 2019 @ 12:45 - 13:45
“Innovation and Foundation Ownership”
(Note: the seminar is on Wednesday)
Abstract: In this contribution, we investigate the impact of foundation ownership on the innovation activity by firms on a global scale. We exploit a matched sample comprising 95,532 firms operating worldwide, whose equity is participated by 57,501 unique foundations in the period 2007-2018. First, we show and discuss different governance models across the United States and the European Union, on one hand, and between Northern Europe and Southern Europe, on the other hand. Then, we find that when foundations behave as long-term shareholders, keeping an equity stake for no less than five years, they do contribute to a higher innovation activity measured in terms of new registered patents. In fact, innovation is higher when a foundation sits in the shareholders’ assembly together with an industrial shareholder. The impact is stronger at relatively higher equity thresholds. Eventually, results are robust to challenges on reverse causality, e.g. cherry-picking by investors, after we perform a difference-in-difference analysis and a propensity score matching technique.