Institutional investor networks and firm innovation: Evidence from China

Fan, Yaoyao; Ly, Kim Cuong; Jiang, Yuxiang

Abstract

We examine the impact of institutional investor networks on firm innovation in China. Employing the unexpected departure of mutual fund managers and the inclusion of the Shanghai-Shenzhen 300 index as identifications, we find that institutional investor networks have a positive impact on firm innovation. Specifically, firms that are hold by well-connected institutional investors are motivated to make R&D investments and receive greater patents than their counterparts. This positive influence is more pronounced for non-SOEs and for firms located in less-developed regions, indicating that institutional investor networks act as information flow facilitator and a value certifier to encourage innovation activities.

Citation

Fan, Y., Ly, K. C., & Jiang, Y. (2023). Institutional investor networks and firm innovation: Evidence from China. International Review of Financial Analysis, 89, Article 102751. https://doi.org/10.1016/j.irfa.2023.102751

• Journal Article Type: Article
• Acceptance Date: Jun 27, 2023
• Online Publication Date: Jun 29, 2023
• Publication Date: 2023-10
• Deposit Date: Mar 12, 2024
• Publicly Available Date: Dec 30, 2024
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Electronic ISSN: 1873-8079
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 89
• Article Number: 102751
• DOI: https://doi.org/10.1016/j.irfa.2023.102751
• Keywords: Institutional investor networks; Innovation; Mutual funds; China JEL Classification: G30; G32; D80; O31
• Public URL: https://nottingham-repository.worktribe.com/output/32456772
• Publisher URL: https://www.sciencedirect.com/science/article/abs/pii/S1057521923002673?via%3Dihub