Do institutional ownership and innovation influence idiosyncratic risk?

Geeta Duppati, Ploypailin Kijkasiwat, Ahmed Hunjra () and Chee Liew

Global Finance Journal, 2023, vol. 56, issue C

Abstract: Business decisions influence the level of idiosyncratic risk. Several factors that contribute to idiosyncratic risk must be explored. Therefore, we examine the impact of innovation and institutional ownership on idiosyncratic risk for NYSE- and NASDAQ-listed firms. The sample contains 30,888 firm-year observations based on annual data from 2003 to 2016. We use a dynamic panel approach to address potential endogeneity difficulties when analyzing the results. Large-scale innovation activity, institutional investors, and innovation reduce idiosyncratic risk. Furthermore, the interactions between institutional investors and high-level ownership stakeholders considerably minimize idiosyncratic risk. Our study demonstrates that the degree to which firms adopt innovation and institutional ownership may affect firm-specific hazards.

Keywords: Innovation; Ownership structure; Idiosyncratic risk (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028322000722
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:56:y:2023:i:c:s1044028322000722

DOI: 10.1016/j.gfj.2022.100770

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().