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Diversified Institutional Ownership and Firm Innovation

Huang, Yen-Lin
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Abstract

In this paper, I investigate the impact of diversified institutional ownership on firm innovation. I find that innovation productivity improves along with an increase in ownership by diversified institutions. This result is supported by a natural experiment design based on financial institution mergers. The results are consistent with the hypothesis that information complementarity drives the higher innovation productivity of firms held by institutional investors with diversified portfolios.

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Date
2023-01-06
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Research Projects
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Keywords
Institutional Investor, Portfolio Diversification, Innovation, Institutional Ownership
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