Vera Apri Dina Safitri, Berwin Anggara
Accounting Department, Faculty of Economics & Business, Lampung University
Innovation is fundamental for company to be able to contend. Innovation is a basic instrument for companies to compete (Baumol, 2002). Innovation is a process in adpoting new ideas for new products or business process (Amin & Aslam, 2017). Enhancement of R&D activities become a key to innovate (Ehie dan Olibe, 2010). R&D investation often used for index which can measure the level of company innovation (Lee and Min, 2015). One of method that company do to innovate is through investment in R&D (research and development) activities. The aim of this study is to find out the factors that affect company innovation. The observed variable in this study is company innovation reflected by R&D
investment, concentrated ownership and eco-efficiency. The analysis model used in this research is literatures study. Literatures evidence the factors that affecting company innovation reflected by R&D investment are concentrated ownership and eco-efficiency. The concentrated ownership becomes negative factor in company innovation that is allegedly caused by a conflict between majority and minority shareholders. Furthermore, risk avoidance that caused by lack of diversification worsen the reluctance of majority shareholder to innovate whilst eco-efficiency has positive effect to company innovation because the resources usage saving will trigger company to innovate through R&D.
Eco-efficiency has been focusly researched by Bran et al (2011) who suggested that eco-efficiency is an enhancement of efficiency and company performance environment. The efficiency that resulted from an uplift of production stability accompanied with cost reduction of water consumption, energy consumption and waste production. Along with efficiency, companies would be encouraged to do innovation with raising fund investment in R&D.
Keywords: innovation, R&D, concentrated ownership, eco-efficiency
JEL Codes: O32, G32, D61