College of Business

One way that firms attempt to innovate is through investment in R&D activity. However, there is much heterogeneity in innovations among firms making comparable R&D investments. This paper explores employee ownership’s moderating effect on the relationship between R&D intensity and innovative output. The basis for the moderation is that ownership increases motivation and commitment to the innovation agenda of the company, and retains employees’ entrepreneurial efforts for internal opportunities. Using hierarchical regression, the data support the hypothesis that employee stock ownership positively moderates the relationship between R&D intensity and innovative output. Implications for future research and practice are addressed.

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