 Social norm differences and innovation: do institutional investors always spur corporate innovation?So Yean Kwack and Jinhee Kim Pacific-Basin Finance Journal, 2025, vol. 90, issue C Abstract: This paper examines how culture/social norms affect the role of institutional investors in fostering corporate innovation. We find that foreign institutional ownership has a positive association with innovation output only if these investors are from countries with more creative or less risk-averse cultures, compared to the country in which a firm is incorporated. The positive role of these institutions holds true even when they are non-independent investors, are from weak governance countries, or tend to invest in less-innovative industries. The results suggest that foreign institutions with more innovation-friendly social norms enhance corporate innovation primarily through the social norm channel, rather than through governance mechanisms or selective investment in innovative firms. In other words, these institutions could help a firm to overcome cultural barriers to innovation by bringing positive attitudes toward innovation. Keywords: Innovation; Institutional ownership; Social norms; Culture (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x24003962 DOI: 10.1016/j.pacfin.2024.102644 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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