Can Institutional Investors Promote Technological Innovation?

Technological innovation is very important for enterprise development and an important driving force for a country's long-term economic growth.Enterprise innovation can bring more long-term benefits to itself,but innovation activities mean that enterprises will bear greater risks in the short term.At present,Chinese enterprises are facing the problems of industrial upgrading and structural adjustment,and innovation is the most important development in this period.In recent years,the share-holding ratio of institutional investors has been rising,and the important role of institutional investors in capital guidance and corporate governance has gradually been paid attention by academia and the government.The positive role of institutional investors in macro-capital market and micro-company level can be transmitted to technological innovation activities of enterprises to provide impetus for technological innovation.Different types of institutional investors have different effects on corporate technology.Whether there are significant differences in the impact of technological innovation is the main content of this study.Based on the information asymmetry theory,principal-agent theory,corporate governance theory and corporate innovation theory,this paper combines the literature review,and proposes that institutional investors mainly provide strong guarantee for technological innovation activities of enterprises from the aspects of mitigating information asymmetry,supervision and management and risk tolerance.This paper focuses on the following three aspects:(1)Can institutional investors' shareholding promote technological innovation?(2)Among heterogeneous institutional investors,do independent and non-independent institutional investors have different impacts on corporate innovation?(3)Can QFI shareholding I promote technological innovation? In the empirical research part,we use the financial data of A-share listed companies from 2007 to 2017 as samples to construct a fixed-effect multiple regression model.The results show that:(1)The overall institutional investors' shareholding has a significant positive effect on the technological innovation of the company,especially the technological innovation of the company measured by the number of patent applications for invention.(2)Independent institutional investors' shareholding can promote enterprise innovation;in contrast,non-independent institutional investors' shareholding can not play this role.(3)Both domestic institutional investors and QFII can promote technological innovation.(4)Among the two types of institutional investors based on the transaction style of public funds,both the robust institutional investors and the speculative institutional investors can play a positive role in technological innovation of enterprises,and the former has a stronger effect.After the control robustness test and endogenous test,the above conclusions are still valid.In addition,this paper further analyses the impact mechanism of institutional investors on technological innovation of enterprises,and finds that the main channels for institutional investors to promote technological innovation of companies are to supervise R&D investment,to provide professional protection for innovation risk tolerance by reducing the sensitivity of executive compensation performance,and to alleviate the degree of financing constraints of companies,so as to provide the company with innovative activities.This support.The effects of heterogeneous institutional investors on these three aspects are tested.Therefore,some suggestions are put forward to clarify the normative participation of institutional investors in corporate governance and strengthen the guiding and supervisory role of the company,and actively introduce positive institutional investors to shareholding,so as to improve the level of R&D and innovation ability of enterprises.