The Effect Of Institutional Ownership On Firm Innovation
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The Effect Of Institutional Ownership On Firm Innovation
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Author : Zhao Rong
language : en
Publisher:
Release Date : 2017
The Effect Of Institutional Ownership On Firm Innovation written by Zhao Rong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
The Relationship Between A Firm S Ownership Structure Governance And Innovation
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Author : Erica J. Wagner
language : en
Publisher:
Release Date : 2018
The Relationship Between A Firm S Ownership Structure Governance And Innovation written by Erica J. Wagner and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Electronic books categories.
Firm innovation is key for many companies to continuously thrive in the marketplace. Unfortunately, there are drawbacks to making innovative investments because of the upfront costs and riskiness of future returns. This creates conflicts because managers are under pressure to meet short-term earnings forecasts. A managers' short-term focus on a firm's business strategy may not be in the best interests of the shareholders' long-term vision of a firm. For this reason, a strong corporate governance system can trigger an increased level of monitoring of the decision-making of managers so that it's aligned with shareholders' goals. Often, a firm's long-term strategy focuses on firm innovation. A major influencer of a firm's innovative strategy is its ownership structure. This research specifically focuses on the impact of ownership concentration, institutional ownership, activist investors, large passive investors, and Board of Director composition on firm innovation. Key components of a firm's organizational structure, such as ownership concentration and Board member composition, are analyzed to explain the variance iv of innovation when other variables are controlled. Based on a sample of technology firms, the findings show that publicly-traded information technology firms' level of passive investors and percentage of independent Board members are significant relative to firm innovation. There are also important findings from the unsupported variables, which are the firm's ownership concentration of shareholders, activist investors, and institutional investors. Finally, inferences are drawn from these results as to whether a firm's ownership structure and governance affect a firm's long-term strategy.
Institutional Investors Ownership Stability And Firms Innovation
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Author : Hamid Sakaki
language : en
Publisher:
Release Date : 2019
Institutional Investors Ownership Stability And Firms Innovation written by Hamid Sakaki and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
We examine the relationship between various measures of institutional ownership and investee firms' level of innovation as measured by the number of patents and patent citations. We find a direct association between the stability in the equity ownership of institutional investors and their investee firms' level of innovation. Our main finding would serve to reassure managers that they benefit from the support of long-term-oriented institutional investors who adopt a "buy and hold" investment philosophy as opposed to a "trading" philosophy. We also examine the association between the proportion of a firm's equity held by institutional investors and its innovation and find that it relies on the type of the investor. For instance, while there exists a positive association between mutual funds and firm innovation yet, the association is only positive for funds that actively manage their portfolios different from their benchmark index. Next, pressure-sensitive institutional investors' shareholdings are positively correlated with firm innovation; however, it is not necessarily the case for all the pressure-insensitive investors.
How Do Foreign Institutional Investors Enhance Firm Innovation
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Author : Hoang Luong
language : en
Publisher:
Release Date : 2017
How Do Foreign Institutional Investors Enhance Firm Innovation written by Hoang Luong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
We examine the effect of foreign institutional investors on firm innovation. Using firm-level data across 26 non-U.S. economies between 2000 and 2010, we show that foreign institutional ownership has a positive, causal effect on firm innovation. We further explore three possible underlying mechanisms through which foreign institutions affect firm innovation: foreign institutions act as active monitors, provide insurance for firm managers against innovation failures, and promote knowledge spillovers from high-innovation economies. Our paper sheds new light on the real effects of foreign institutions on firm innovation.
Firm Innovation And Institutional Investment
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Author : Nida Abdioglu
language : en
Publisher:
Release Date : 2013
Firm Innovation And Institutional Investment written by Nida Abdioglu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This paper investigates the effect of the Sarbanes-Oxley Act (SOX) on the relation between institutional ownership (IO) and firm innovation. We find that US firms investing in innovation attract more institutional capital post-SOX. Prior literature identifies two SOX effects on the average US firm that could drive this relation, that is, a decreased level of information asymmetry (direct effect) and the consequent increased market liquidity (indirect effect). Our findings overwhelmingly support the direct effect. In particular, we find that the positive relation between IO and innovation post-SOX is mainly driven by passive and dedicated institutional investors. These investors benefit greatly from a reduction in the firm's information asymmetry but receive little gain from improvements in market liquidity, given their long-term trading horizon. Our results are robust to different model specifications, including difference-in-differences tests, which alleviate concerns about the impact of confounding effects to our conclusions. Taken together, our findings indicate an important policy effect of SOX, namely, the strengthening of institutional investor support for firm innovation.
The Effect Of Institutional Ownership On Firm Performance
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Author : Tripti Nashier
language : en
Publisher:
Release Date : 2017
The Effect Of Institutional Ownership On Firm Performance written by Tripti Nashier and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
The role of institutional investors in corporate governance is widely recognized. This study investigates whether institutional investors are active monitors or passive investors by examining the relationship between institutional ownership and firm performance for a sample of 11,136 firm-year observations from 1,392 non-financial firms listed on the BSE from 2007 to 2014. It employs panel data regression models and instrumental variables regression using generalized method of moments to control for unobserved heterogeneity and possible endogeneity of ownership variables. The results reveal that institutional ownership has a positive impact on firm performance. Institutional ownership is disaggregated into domestic and foreign institutional ownership and it is observed that both the categories positively affect the firm performance. The findings suggest that institutional investors, whether domestic or foreign, are able to monitor managements' actions and decisions effectively and help to improve firm performance. It also finds the relationship between institutional ownership and firm performance to be endogenous.
Relationships Between Institutional Ownership Capital Structure And Research And Development Investment
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Author : Hsueh-En Hsu
language : en
Publisher:
Release Date : 2016
Relationships Between Institutional Ownership Capital Structure And Research And Development Investment written by Hsueh-En Hsu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Research and development (R&D) is vital for an information technology (IT) firm's innovation. This study investigates the relationship among institutional ownership, capital structure, and research and development investment for 336 listed information technology firms from 2006 to 2009. Empirical evidence shows that there is no significant relationship between institutional ownership and research and development investment. The finding suggests that institutional investors may not influence management decision making on research and development investment. This study also finds that capital structure has a negative relationship with research and development investment. The result indicates that information technology firms may use less debt when the investment outcome is uncertain.
Institutional Ownership And Firm Performance
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Author : Yusheng Cen
language : en
Publisher:
Release Date : 2020
Institutional Ownership And Firm Performance written by Yusheng Cen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
In this thesis, I analyze the roles of different institutional investors and how they affect firm performance based on a global dataset of 31 countries (regions) from 2007 to 2016. Breaking down institutions by geographic information (domestic or foreign) and type (such as mutual fund or pension funds), I first find that all institutions share preference for large firms, firms that experienced negative stock returns, and firms with lower leverage and high liquidity. I also find that various types of institutional investors affect firms' operating performance differently. The relation is convex for foreign institutions, while the opposite is true for domestic institutions. This indicates that foreign institutional investors exert better corporate governance when ownership is high, while domestic institutions are subject to business ties with firms when they hold substantial amounts of voting rights. Further analysis reveals a U-shaped relationship between firms' operating performance and the ownership level of investment advisors/bank trusts/pension funds, indicating a monitoring effect with high levels of ownership. However, mutual funds exhibit a concave influence on firm value, signifying negative impact of business ties when ownership is high. The findings for other types of institutions (hedge fund and insurance companies) are inconclusive.
Three Essays On Institutional Investment
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Author : Nida Abdioglu
language : en
Publisher:
Release Date : 2012
Three Essays On Institutional Investment written by Nida Abdioglu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
This thesis investigates the investment preferences of institutional investors in the United States (US). In the second chapter, I analyse the impact of both firm and country-level determinants of foreign institutional investment. I find that the governance quality in a foreign institutional investor's (FII) home country is a determinant of their decision to invest in the US market. My findings indicate that investors who come from countries with governance setups similar to that of the US invest more in the United States. The investment levels though, are more pronounced for countries with governance setups just below that of the US. My results are consistent with both the 'flight to quality' and 'familiarity' arguments, and help reconcile prior contradictory empirical evidence. At the firm level, I present unequivocal evidence in favour of the familiarity argument. FII domiciled in countries with high governance quality prefer to invest in US firms with high corporate governance quality. In the third chapter, I investigate the impact of the Sarbanes-Oxley Act (SOX) on foreign institutional investment in the United States. I find that, post-SOX, FII increase their equity holdings in US listed firms. This result is mainly driven by passive, non-monitoring FII, who have the most to gain from the SOX-led reduction in firm information asymmetry, and the consequent reduction in the value of private information. The enactment of SOX appears to have changed the firm-level investment preferences of FII towards firms that would not be their traditional investment targets based on prudent man rules, e.g., smaller and riskier firms. In contrast to the extant literature, which mostly documents a negative SOX effect for the US markets, my chapter provides evidence of a positive SOX effect, namely the increase in foreign investment. In the fourth chapter, I examine the effect of SOX on the relation between firm innovation and institutional ownership. I find that US firms investing in innovation attract more institutional capital post-SOX. Prior literature highlights two SOX effects that could cause this result: a decreased level of information asymmetry (direct effect) and increased market liquidity (indirect effect). My findings support the direct effect, as I find that the positive relation between innovation and institutional ownership is driven by passive and dedicated institutional investors. A reduction in firms' information asymmetry is beneficial for these investors while they gain less from increased market liquidity. Overall, my results indicate that SOX is an important policy that has strengthened the institutional investor's support for firm innovation.
Corporate Governance Strengthening Latin American Corporate Governance The Role Of Institutional Investors
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Author : OECD
language : en
Publisher: OECD Publishing
Release Date : 2011-07-01
Corporate Governance Strengthening Latin American Corporate Governance The Role Of Institutional Investors written by OECD and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-07-01 with categories.
This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.