Institutional Ownership and the Nature of Corporate Innovation

Sampsa Samila, Markus Simeth, David Wehrheim

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

This paper analyzes whether institutional ownership affects the rate and nature of corporate innovation. We explicitly consider the heterogeneity of firm innovation by differentiating upstream scientific research from downstream technology development using novel scientific publication and patent indicators. Our analysis shows that greater presence of institutional owners has a negative impact on scientific research, whereas there is no effect on technology development. Consistent with a short-term orientation of institutional owners, we further show that scientific research is associated with lower short-term operating performance but higher long-term firm value. These findings support the view that capital markets in general, and institutional owners in particular, can induce myopic firm behavior.
Original languageEnglish
Publication date2021
Number of pages45
Publication statusPublished - 2021
EventDRUID21 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 18 Oct 202120 Oct 2021
Conference number: 42
https://conference.druid.dk/Druid/?confId=62

Conference

ConferenceDRUID21 Conference
Number42
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period18/10/202120/10/2021
Internet address

Keywords

  • Institutional ownership
  • Corporate governance
  • Innovation
  • Scientific publications
  • Patents

Cite this