Institutional investors' corporate site visits and corporate innovation

Xuanyu Jiang and Qingbo Yuan

Journal of Corporate Finance, 2018, vol. 48, issue C, 148-168

Abstract: This study investigates whether and how institutional investors' site visits affect corporate innovation. Using all Chinese firms listed in the Shenzhen Stock Exchange from 2009 to 2013, we find that institutional investors' site visits significantly enhance corporate innovation and this effect is more pronounced for firms with a lower-quality information environment and poor corporate governance. We further find that the governance effect of site visits on innovation is consistent with career concerns rather than the quiet life hypothesis. We perform two stage-least square analysis to address possible endogeneity concerns and several robustness checks including using alternative measures of site visits and corporate innovation, alternative model specifications, and controlling for firm fixed effects. We also find that the effects of institutions' site visits are substitutes for the effects of institutional shareholding.

Keywords: Corporate site visits; Corporate innovation; Information environment; Career concern; Quiet life (search for similar items in EconPapers)
JEL-codes: G23 G34 O31 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (139)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:48:y:2018:i:c:p:148-168

DOI: 10.1016/j.jcorpfin.2017.09.019

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