Employee stock ownership and corporate R&D expenditures: Evidence from Taiwan's information-technology industry

This study investigates how employee stock ownership affects corporate R&D expenditures for information-technology firms listed on the Taiwan Stock Exchange during 1996-2001. The empirical results indicate a positive association between implementing employee stock ownership and R&D expenditures. The evidence thus supports the argument that employee stock ownership could help alleviate agency conflicts between employees and shareholders, and reduce agency costs, in turn enabling firms to make sizable R&D expenditures. © Springer Science+Business Media, LLC 2006.