Abstract
Using an unbalanced panel of Continental European listed corporations, this paper examines whether the investment opportunity set (IOS) moderates the negative relation between two of the most frequent types of ownership structure – family ownership and state ownership – and R&D investments. We find that corporations controlled either by family or by the State encourage investments in R&D only in the presence of attractive investment opportunities. The main highlight of our findings is that the IOS exerts not only direct effect on corporate R&D investments, but also it can indirectly affect an organizational propensity to invest in R&D through its effect on ownership structure.