On “Innovation and institutional ownership”

Markus Simeth, David Wehrheim*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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In their article “Innovation and Institutional Ownership”, Aghion, Van Reenen and Zingales (2013) find that the rise in institutional stock ownership in the U.S. during the 1990s led to an increase in corporate innovation, as measured by patent and patent citation counts. Their article concludes that “contrary to the view that institutional ownership induces a short-term focus in managers, we find that their presence boosts innovation” (p. 302). Subsequent research has generally accepted this finding at face value. However, we uncover several critical issues with their data. Addressing these issues renders the results economically and statistically insignificant and, in some instances, even suggests a negative relationship between institutional ownership and U.S. innovation.
Original languageEnglish
Article number102569
JournalJournal of Corporate Finance
Number of pages13
Publication statusPublished - Jun 2024


  • Corporate governance
  • Innovation
  • Institutional ownership
  • Managerial short-termism
  • Patents

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