DCC Brownbag - Adam Aoun - Assistant diplômé HEC au département de Comptabilité et Contrôle
Do Research & Development committees impact R&D intensity?
Tuesday 28 January 2020 (14h20 - 15h15) - Anthropole - 3077
We analyze whether the existence of a Research & Development Committee (RDC), at the board of director-level, impacts R&D intensity. Our empirical study is based on a sample of 166 pharmaceutical firms from the United States and Europe over the period 2010-2018. We find a positive association between the existence of a RDC and R&D intensity for US firms, but not for European firms. Our difference-in-differences approach suggests that the creation of a RDC leads to greater R&D intensity, but only in US firms. To control for endogeneity (i.e. the existence of RDC is not random), we use of a two-stage least squares regression, as well as lagged measures of R&D intensity, and entropy balancing. Our additional tests reinforce our main findings. Finally, an exploratory analysis highlights that R&D intensity increases more when more members with a scientific culture are sitting on the RDC. Overall, we conclude that RDC impacts R&D intensity in the US, but such committee has only a symbolic value in Europe.