How Do Foreign Institutional Investors Enhance Firm Innovation? 论文

详细信息

发表期刊/会议

Journal of Financial and Quantitative Analysis

发表日期

2017-07-25

发表年份

2017

摘要

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.