Does minority shareholder activism enhance corporate innovation? Evidence from China

Zhibin Wang and Zelei Li

Finance Research Letters, 2023, vol. 54, issue C

Abstract: Minority shareholder activism (MSA) on online interactive platforms is a novel form of corporate governance in China. This paper investigates whether, and how, innovation-related minority shareholder activism affects corporate innovation. We find that MSA is significantly positively related to firms’ future innovation output. We establish a causal relationship between MSA and future innovation output using both instrumental variable and propensity score matching approaches. We further find that MSA's governance effect on innovation is consistent with career concerns rather than the quiet life hypothesis. Additionally, we find that MSA's effects substitute for institutional investor activism's effects.

Keywords: Minority shareholder activism; Innovation; Corporate governance; Career concern (search for similar items in EconPapers)
JEL-codes: G35 O31 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:54:y:2023:i:c:s1544612323001289

DOI: 10.1016/j.frl.2023.103755

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