Fourth, corporate governance plays

Fourth, corporate governance plays an important role in varying R&D investments (Driver & Guedes, 2012). Good governance reduces information asymmetry and increases the supply of funds when the returns from R&D increase that result in increasing R&D investment. Conversely, as the returns for the per unit cost of R&D funds decline, poor corporate governance reduces the supply of R&D funds. We posit that corporate governance better induces these oscillations because the board plays an important role in allocating investments. The proposed hypothesis is motivated by the question—who governs R&D volatility?:H1. The relation between R&D volatility and a firm's growth is stronger with a higher level of corporate governance.