Replication data for: Innovation and Institutional Ownership

Principal Investigator(s): View help for Principal Investigator(s) Philippe Aghion; John Van Reenen; Luigi Zingales

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Project Citation:

Aghion, Philippe, Van Reenen, John, and Zingales, Luigi. Replication data for: Innovation and Institutional Ownership. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112591V1

Project Description

Summary: 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)

Scope of Project

JEL Classification:
      G23 Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
      G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
      L25 Firm Performance: Size, Diversification, and Scope
      M10 Business Administration: General
      O31 Innovation and Invention: Processes and Incentives
      O34 Intellectual Property and Intellectual Capital

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Published Versions

V1 [2019-10-11]

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