Institutional investor networks and firm innovation: Evidence from China

Yaoyao Fan, Kim Cuong Ly and Yuxiang Jiang

International Review of Financial Analysis, 2023, vol. 89, issue C

Abstract: We examine the impact of institutional investor networks on firm innovation in China. Employing the unexpected departure of mutual fund managers and the inclusion of the Shanghai-Shenzhen 300 index as identifications, we find that institutional investor networks have a positive impact on firm innovation. Specifically, firms that are hold by well-connected institutional investors are motivated to make R&D investments and receive greater patents than their counterparts. This positive influence is more pronounced for non-SOEs and for firms located in less-developed regions, indicating that institutional investor networks act as information flow facilitator and a value certifier to encourage innovation activities.

Keywords: Institutional investor networks; Innovation; Mutual funds; China (search for similar items in EconPapers)
JEL-codes: D80 G30 G32 O31 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:89:y:2023:i:c:s1057521923002673

DOI: 10.1016/j.irfa.2023.102751

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