Will Institutional Investors' Site Visit Affect Corporate Innovation

Institutional investors play an increasingly important role in the financial market.Institutional investors reduce the information asymmetry by transmitting information in the market and publishing profit forecasts to the ordinary investors.The main sources of information are Public information and private information,According to a survey conducted in Europe in 2012,site visit as one of the methods of collecting private information,it has become one of the most effective ways for institutional investors to obtain information,which is more important than talk with corporate executives in One-on-one meeting and the value of analyst reports.There are many factors influencing enterprise innovation,including financing constraints caused by information asymmetry and corporate governance,especially agency conflicts.Institutional investors' site visit can significantly alleviate information asymmetry and enhance the role of institutional investors in internal and external supervision and governance.So can institutional investors' site visit promote business innovation?Is the way to promote enterprise innovation in the site visit to reduce financing constraints by easing information asymmetry and enhance corporate governance to ease agency conflicts?This article examines the above issues.This paper takes the A-share listed companies of the Shenzhen Stock Exchange as a sample from 2012 to 2016 innovations meastred by the pumber of patents granted to the company,the intensity of the firm's site visit measured by the number of site visit,and selects the modified Jones model to calculate the enterprise information environment,using Principal Component Analysis method calculates the level of corporate governance.The results show that(1)there is a significant positive correlation between institutional investors' site visits and corporate innovation.Further research relates the impact of site visit on corporate innovation under different corporate information environments,shareholding structure,and corporate governance levels,through regression(2)compared with companies with better information quality,The relationship between site visit and corporate innovation by poor information quality companies is more pronounced.(3)Compared with enterprises with better corporate governance,The relationship between site visit and corporate innovation by poor corporate governance is more pronounced.(4)Compared with state-owned enterprises,institutional investors'site visitpromote enterprise innovation more obvious for non-state-owned enterprise.For the main test hypothesis,adopts four methods for regression test.(1)The intensity of the survey is measured by the number of agencies which participate in site visit in one year.(2)The strength of the survey is measured by the number of site visit in one year,(3)Measuring enterprise innovation with R&D investment(4)In order to eliminate endogenous concerns,the introduction of instrumental variables using 2SLS for regression,the regression results using the above four methods are consistent.For the hypothesis-2,use the institutions which participate in site visit in one year to replace the number of site visit in a year to measure the intensity of the survey,and the use of other indicators to measure corporate governance and then conduct a robust test,the results are consistent.Finally,based on the above theoretical analysis and empirical results,this paper puts forward relevant policy recommendations,and briefly describes possible future research directions.