The effect of institutional ownership and ownership dispersion on eco-innovation
Cristina Aibar-Guzmán and
Technological Forecasting and Social Change, 2020, vol. 158, issue C
This paper aims to determine the role that the different institutional investors play in promoting eco-innovation, focusing on the analysis of the corrective or enhancing effect that can be derived from ownership dispersion related to the participation in a company's stock capital of institutional investors with different time horizons. The results obtained for a sample of 6,454 companies for the period 2002–2017 show the convergence of the short-term institutional investors’ interests with the long-term institutional investors’ demands, which has a positive effect on the implementation of proactive environmental strategies, such as eco-innovation. Additionally, this positive effect is enhanced by disperse ownership structures associated with the participation in a company's stock capital of both types of institutional investors, thereby increasing the firm's commitment to environmental sustainability. Although financial institutions and pension funds diverge from this long-term orientation, seeking an immediate economic return, ownership dispersion allows for correcting their individual negative effect on eco-innovation.
Keywords: Eco-innovation; Institutional ownership; Ownership dispersion; Corporate social responsibility (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:158:y:2020:i:c:s0040162520309999
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