Institutional Ownership and the Nature of Corporate Innovation

Sampsa  Samila; Markus  Simeth; David Wehrheim

doi:10.5465/AMBPP.2022.17744abstract

Institutional Ownership and the Nature of Corporate Innovation

Sampsa Samila, Markus Simeth, David Wehrheim

Department of Strategy and Innovation

IESE Business School, University of Navarra

Research output: Chapter in Book/Report/Conference proceeding › Conference abstract in proceedings › Research › peer-review

Abstract

This paper analyzes whether institutional ownership affects the nature of corporate innovation. We consider the heterogeneity of firm innovation by differentiating upstream research from downstream development using novel indicators for scientific publications and patents. Our analysis shows that institutional owners have a negative impact on upstream research, whereas there is no effect on downstream 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 language	English
Title of host publication	Proceedings of the Eighty-second Annual Meeting of the Academy of Management
Editors	Sonja Taneja
Number of pages	1
Place of Publication	Briarcliff Manor, NY
Publisher	Academy of Management
Publication date	2022
Pages	3947
DOIs	https://doi.org/10.5465/AMBPP.2022.17744abstract
Publication status	Published - 2022
Event	The Academy of Management Annual Meeting 2022: Creating a Better World Together - Seattle, United States Duration: 5 Aug 2022 → 9 Aug 2022 Conference number: 82 https://2022.aom.org/

Conference

Conference	The Academy of Management Annual Meeting 2022
Number	82
Country/Territory	United States
City	Seattle
Period	05/08/2022 → 09/08/2022
Internet address	https://2022.aom.org/

Series	Academy of Management Proceedings
ISSN	0065-0668

Keywords

AOM annual meeting proceedings 2022
AOM seattle 2022

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10.5465/AMBPP.2022.17744abstractLicence: Unspecified

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Cite this

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title = "Institutional Ownership and the Nature of Corporate Innovation",

abstract = "This paper analyzes whether institutional ownership affects the nature of corporate innovation. We consider the heterogeneity of firm innovation by differentiating upstream research from downstream development using novel indicators for scientific publications and patents. Our analysis shows that institutional owners have a negative impact on upstream research, whereas there is no effect on downstream 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.",

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Samila, S, Simeth, M & Wehrheim, D 2022, Institutional Ownership and the Nature of Corporate Innovation. in S Taneja (ed.), Proceedings of the Eighty-second Annual Meeting of the Academy of Management. Academy of Management, Briarcliff Manor, NY, Academy of Management Proceedings, pp. 3947, The Academy of Management Annual Meeting 2022, Seattle, Washington, United States, 05/08/2022. https://doi.org/10.5465/AMBPP.2022.17744abstract

Institutional Ownership and the Nature of Corporate Innovation. / Samila, Sampsa ; Simeth, Markus ; Wehrheim, David.
Proceedings of the Eighty-second Annual Meeting of the Academy of Management. ed. / Sonja Taneja. Briarcliff Manor, NY: Academy of Management, 2022. p. 3947 (Academy of Management Proceedings).

Research output: Chapter in Book/Report/Conference proceeding › Conference abstract in proceedings › Research › peer-review

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AB - This paper analyzes whether institutional ownership affects the nature of corporate innovation. We consider the heterogeneity of firm innovation by differentiating upstream research from downstream development using novel indicators for scientific publications and patents. Our analysis shows that institutional owners have a negative impact on upstream research, whereas there is no effect on downstream 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.

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