How do foreign institutional investors enhance firm innovation?

Luong, H, Moshirian, F, Nguyen, L, Tian, X and Zhang, B 2017, 'How do foreign institutional investors enhance firm innovation?', Journal of Financial and Quantitative Analysis, vol. 52, no. 4, pp. 1449-1490.


Document type: Journal Article
Collection: Journal Articles

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Title How do foreign institutional investors enhance firm innovation?
Author(s) Luong, H
Moshirian, F
Nguyen, L
Tian, X
Zhang, B
Year 2017
Journal name Journal of Financial and Quantitative Analysis
Volume number 52
Issue number 4
Start page 1449
End page 1490
Total pages 42
Publisher Cambridge University Press
Abstract We examine the effect of foreign institutional investors on firm innovation. Using firm-level data across 26 non-U.S. economies between 2000 and 2010, we show that foreign institutional ownership has a positive, causal effect on firm innovation. We further explore three possible underlying mechanisms through which foreign institutions affect firm innovation: Foreign institutions act as active monitors, provide insurance for firm managers against innovation failures, and promote knowledge spillovers from high-innovation economies. Our article sheds new light on the real effects of foreign institutions on firm innovation.
Subject Finance
DOI - identifier 10.1017/S0022109017000497
Copyright notice © 2017 Michael G. Foster School of Business, University of Washington.
ISSN 0022-1090
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Citation counts: TR Web of Science Citation Count  Cited 8 times in Thomson Reuters Web of Science Article | Citations
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