Institutional Investors' Shareholding And Corporate Innovation

Innovation is the decisive factor for enterprises as well as countries to maintain long-term competitive advantage,and it is also the main source of power for a country to maintain economic development,but also an important engine to promote social development.As the core team of the whole innovation field of the country,the willingness and ability of enterprises to innovate are the key to national innovation,and as individuals carrying out innovation activities,their innovation ability not only determines their own development,but also determines the level of national competitiveness.Existing relevant research shows that there are many factors that can affect the R&D innovation ability of enterprises,and among this series of influencing factors,the influence of institutional investors' shareholding is more prominent Because institutional investors have become one of the important participants in China's stock market by virtue of their large capital size,strong research capabilities,relatively low cost of information access and other characteristics,compared with the average retail investors and other small and medium-sized investors,institutional investors are significantly higher willingness to participate in corporate governance in the interest and feasibility of the situation,especially to be able to exert their own influence on corporate R&D innovation-related decisions.In the existing research literature,there are some scholars' studies show that institutional investors,because of their large shareholding and exerting a large role,will actively participate in the company's relevant decisions,through the appointment of directors to form their own voice in the company's governance,to influence the enterprise R&D innovation investment decisions,to a certain extent to alleviate the problem of corporate governance,so as to be able to promote the improvement of the enterprise's innovation capacity;there are also a number of Scholars' research shows that institutional investors are not willing to make long-term investments because of their performance appraisal methods,and they prefer short-term transactions.In this environment,corporate governance is likely to reduce investment in research and development in order to cater to investors and avoid the decline in performance leading to a drop in stock price,so an increase in the proportion of institutional investors'shareholding will inhibit the R&D innovation capacity of listed companies.Therefore,no unified conclusion has been reached on the relationship between institutional investors and corporate innovation in the current research.In addition,institutional investors is a collective term,not just a certain type of investors,which includes different types of investors,the different impact on corporate innovation may be partly due to the differences in the main body of institutional investors,so this paper is a reasonable classification of institutional investors to explore the classification,which helps to clarify the heterogeneity of institutional investors lead to the different impact on corporate innovation capacity.In addition,the innovation output of enterprises is often measured by the number of patents,and there are three types of patents in China,each representing different technological content,this paper divides the quality of innovation output of enterprises according to the level of patent technology content,and then explores the impact of institutional investors' shareholding on the quality of innovation output of listed companies in China;finally,on the basis of theoretical analysis,this paper explores the impact of institutional investors' shareholding on the quality of innovation output of listed companies in China.The channels through which investors influence the innovation capacity of enterprises.This paper takes 2621 listed companies with complete R&D investment amount as well as the number of patent licenses in China from 2007 to 2017 as the object of study,and conducts empirical research on the relationship between institutional investors' shareholding and enterprises' innovation capacity on the basis of theoretical analysis.According to the regression results,I draw the following relevant conclusions:(1)the increase in the proportion of institutional investors' shareholding can more significantly increase the amount of R&D investment and the number of patents granted by Chinese listed companies;(2)among the heterogeneous institutional investors,independent institutional investors can significantly contribute to the improvement of listed companies' innovation capacity,but non-independent ones have no significant effect;(3)institutional(4)The influence of heterogeneous institutional investors on the innovation quality of listed companies also differs,including Independent institutional investors have a facilitating effect on radical innovation and a dampening effect on incremental innovation,while non-independent institutional investors only have a facilitating effect on incremental innovation.(5)The financing constraint plays a partial mediating effect in the process of institutional investors as a whole as well as independent institutional investors influencing firms' innovativeness.Summarizing the results of the above empirical analysis,this paper makes the following relevant recommendations:institutional investors,as an important force in China's stock market,can subsequently formulate a series of policies to encourage development;private enterprises play an important role in innovation because of their own advantages,and the government can further nurture and develop the private economy;the government and regulatory authorities should strengthen the management of related transactions between institutional investors and enterprises.Develop and strengthen independent institutional investors in China and guide them at the policy level to maintain long-term and effective cooperation with listed companies in China;also improve the relevant system of patent licensing and differentiate to promote enterprise innovation;listed companies can actively introduce institutional investors and pay attention to the professional guidance and business assistance role of institutional investors.