Innovation and Institutional Ownership

• 成果类型: Article
• 署名作者: Aghion, Philippe; Van Reenen, John; Zingales, Luigi
• 署名单位: Harvard University; University of London; London School Economics & Political Science; University of Chicago; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.103.1.277
• 发表日期: 2013
• 页码: 277-304
• 关键词: CORPORATE GOVERNANCE; market value; COMPETITION; incentives; EFFICIENCY; investors

摘要

We find that greater institutional ownership is associated with more innovation. To explore the mechanism, we contrast the lazy manager hypothesis with a model where institutional owners increase innovation incentives through reducing career risks. The evidence favors career concerns. First, we find complementarity between institutional ownership and product market competition, whereas the lazy manager hypothesis predicts substitution. Second, CEOs are less likely to be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables, policy changes, and disaggregating by type of institutional owner, we argue that the effect of institutions on innovation is causal. (JEL G23, G32, L25, M10, O31, O34)