The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms
Zhao Rong (),
Xiaokai Wu and
Philipp Boeing ()
Research Policy, 2017, vol. 46, issue 9, 1533-1551
Monitoring by institutional investors can act as an important mechanism to promote firm innovation. By investigating the patenting behavior of Chinese listed firms between 2002 and 2011, we find that the presence of institutional investors enhances firm innovation. Consistent with this monitoring view, we further find that (1) the effect of institutional investors on firm patenting mainly comes from mutual funds; (2) the effect is more pronounced when product market competition is more intense; (3) the effect exists among private- and minority state-owned enterprises, but not among majority state-owned enterprises. The above findings remain robust when innovation quality is examined.
Keywords: Institutional investor; Firm innovation; Patenting; Mutual funds; China (search for similar items in EconPapers)
JEL-codes: G20 G32 O31 O32 O33 (search for similar items in EconPapers)
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Working Paper: The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:46:y:2017:i:9:p:1533-1551
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