Delegation, Ownership Concentration and R&D Spending: Evidence From Italy


  • We are grateful for helpful comments from Antonio Acconcia, Nick Bloom, Dimitrios Christelis, Sergio Destefanis, Liran Einav, Pino Lubrano, Nour Meddahi, Marco Pagano, Bill Rogerson, Francois Salanié, Nicolas Serrano-Velarde, Emanuele Tarantino, and John Van Reenen. Seminar participants at the Annual I.O. Fest at Berkeley, Federal Reserve Bank of Minneapolis, ASSA Meetings in New Orleans (2008), Society for Economic Dynamics Meetings in Boston (2008) and the Toulouse Applied Econometrics Workshop (2009) are gratefully acknowledged. We also thank the Editor and two referees for important comments that helped us to improve the paper. Attilio Luigi Pasetto and the UniCredit Group are gratefully acknowledged for providing data. All errors remain ours.


We use data from the Italian manufacturing industry to document a positive correlation between delegation and R&D. This result is robust to controlling for the determinants of R&D such as human capital, capital intensity and sectoral or regional effects. We further investigate the determinants of delegation and find that ownership concentration is significantly related to delegation. Among large firms with a dispersed ownership structure, larger ownership concentration implies less delegation, whereas the opposite emerges with more concentrated ownership. Differences between the Northern and Southern regions in terms of firms' propensity to delegate decisions and engage in R&D also emerge.