An Empirical Study On The Impacts Of Institutional Investors Towards Corporate Innovation Capability Based On GEM

Innovation is always the key to promoting economic growth and improving core competence in companies.From the micro point of view,the enterprise is not only the main executive body of innovation,but also the bearer to introduce innovation results into production system.Enterprise innovation ability directly decides the international competitiveness of a country.Existing research shows that enterprise innovation ability is influenced by many factors.Institutional investors own abundant capital,large share-holdings and strong investment capacity,and their power towards listed companies is much higher than individual investors.Therefore,institutional investors can affect company's production and management decision,and have discourse power in innovation decision.So far,the domestic and foreign scholars have studied the relationship between institutional investors and enterprise innovation ability.Some hold that institutional investors effectively solve corporate governance issues and improve innovation abilities through active participation in research and development decisions of listed companies.While others insist if institutional investors prefer short-term operation,managers will usually reduce R&D expenses in order to prevent the decline in performance.Accordingly,institutional investors do harm to the innovation ability of listed companies.This means that the academia hasn't formed a unified opinion for the problem,and this paper helps clarify the relationship between institutional investors and enterprise innovation capacity.We select 365 listed companies including disclosure of R&D expenses and patent amount in GEM as samples for analysis.Through empirical test,the results show that:(1)The institutional investors have significant influence in promoting innovation abilities of listed companies in GEM;(2)The relationship between institutional investors and innovation abilities is different in enterprises with different attributes.Institutional investors can significantly promote the innovation ability of non-state-owned holding enterprises,while negatively affect state-owned holding enterprises;(3)Heterogeneous institutional investors exert different degrees of influence on enterprise innovation abilities,among which the securities investment funds may hinder innovation,insurance fund can significantly promote innovation and QFII has no effect on innovation;(4)The negative effect of securities investment funds to enterprise innovation abilities has nothing to do with the enterprise attributes,and the positive effect of insurance funds to enterprise innovation abilities is mainly concentrated in non-state-owned holding enterprises other than state-owned holding enterprises.On the basis of empirical results,this thesis states that:we should further encourage institutional investors to invest listed companies in GEM;vigorously develop non-state-owned holding enterprises,and gradually promote innovation abilities of state-owned holding enterprises;make the securities investment funds to become strategic investors who pay more attention to long-term value;relax the barriers to entry of the social security fund and insurance funds;actively introduce foreign institutional investors to participate in corporate governance and optimize the structure of our country' s institutional investors.