Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288325 
Year of Publication: 
2020
Citation: 
[Journal:] Empirical Economics [ISSN:] 1435-8921 [Volume:] 61 [Issue:] 3 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2020 [Pages:] 1689-1697
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
We analyze the relationship between institutional investors, innovation and financing constraints. Using the same dataset as Aghion et al. (Am Econ Rev 103(1):277–304, 2013), we find that the effect of institutional ownership on innovation is concentrated in industries with high dependence on external finance and among firms which are a priori likely to be financially constrained. The complementarity between institutional ownership and competition, predicted by the original paper’s theory where institutional investors increase innovation through reducing career risks, disappears once this heterogeneity is taken into account. We also provide evidence that the sensitivity of R&D investment to internal funds decreases with institutional ownership.
Subjects: 
G23
G32
L25
M10
O31
O34
JEL: 
G23
G32
L25
M10
O31
O34
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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