The effect of board of directors on R&D intensity: board tenure and multiple directorships

Taking a combination between agency theory and resource dependence theory, we point out that directors' capital may have an effect on R&D strategies. A sample of both high-tech and low-tech industries for the period 2007-2011 is used. The results indicate that, regardless of the type of industry and the specific expertise on R&D intensive companies, board members with multiple directorships influence R&D corporate strategies. The resources acquired by directors through their experience and connections positively influence R&D intensity, but only if directors can carry out their monitoring activity adequately. This evidence implies a step forward in the understanding of the role of board of directors in corporate strategy, thus having significant implications for academics, companies and regulators, which are both theoretical and practical.