Research On The Influence Of Institutionalinvestors On The Corporate Technologicalinnovation Output

Innovation is the primary driving force for social development.The report of the 19 th national congress of the CPC issues that we should resolutely implement the strategy of innovation-driven development and speed up the building of an innovation-driven country.Enterprises are the main players in technological innovation for countries.And the public companies are the leaders of enterprises.Improving the technological innovation ability of public companies is the key to improve the core competitiveness of Chinese enterprises,promote the optimization of industrial structure and enhance the comprehensive strength of China.Therefore,it is of great practical significance to study the factors influencing the technological innovation of Chinese public companies.Compared with ordinary enterprises,public companies have a unique advantage in technological innovation,which they can disperse risks through a large number of investors.However,the separation of management and ownership of public companies leads to inconsistent management and shareholder objectives of the agency problem will weaken this advantage.It is entirely possible that in order to enjoy a "quiet life",managers are not willing to invest in innovative projects,which adversely affects the output of technological innovation.Therefore,it is of great significance to improve the supervision mechanism of the management and restrain the behavior of the management to promote the production of technological innovation.As a professional investment institution in the capital market,institutional investors not only provide a large amount of financial support to enterprises,but also exert a certain influence on the company's operation and management.Under the strategic guidance of unconventional development of institutional investors,institutional investors have become an important participant in China's securities market.The overall shareholding ratio of securities investment funds,QFII,securities companies and other institutional investors have increased rapidly as well as the improvement of professional level.As an important external supervision force,institutional investors have gradually become the focus of research on whether they can effectively play the role of governance.As for whether institutional investors promote technological innovation,the current research conclusions are mainly divided into "effective supervision hypothesis" and "performance pressure hypothesis".The research focuses on the influence of institutional investors' shareholding and its consequences,and there is a lack of in-depth and systematic discussion on the governance behavior and mechanism of institutional investors.Based on this,we reviewed related literature on the institutional investors and enterprise technology innovation at home and abroad.We take the theory of principalagent theory,the shareholder activism and signaling theory into the theoretical framework.This paper try to explore the following questions:(1)Do institutional investors have an impact on the technological innovation output of enterprises in the new stage of deepening the opening of financial market? If so,is it uplifting or inhibiting?(2)With the increasing degree of external marketization,is the impact of institutional investors on the corporate technological innovation output different from the external marketization environment?(3)If institutional investors,as an external supervision force of public companies,affect the technological innovation output of enterprises,what are the main internal ways to affect the corporate technological innovation output? Finally,based on the data of a-share public companies in Shanghai and Shenzhen from 2007 to 2018,the panel model is established to empirically test the proposed research hypothesis.The empirical results show that:(1)the shareholding of institutional investors can significantly promote the technological innovation output of enterprises.The higher the shareholding ratio of institutional investors,the more actively they will participate in the corporate governance of the invested enterprises,alleviate the agency conflicts,effectively supervise the management and business activities,reduce the short-sighted behavior of the management and improve the technological innovation ability of the enterprises.(2)The shareholding of pressure-resistant institutional investors has a significant promoting effect on the technological innovation output,while the pressuresensitive institutional investors have no significant influence on the technological innovation of the company.(3)The higher the degree of marketization in the region,the more helpful it is for the institutional investors to exert the external supervision effect and promote the technological innovation output.(4)The mechanism analysis results are as follows:First,institutional investors improve the technological innovation performance of enterprises by reducing the degree of information uncertainty.Through investment and purchase behavior,institutional investors transmit the real information of the invested enterprises,alleviate the information asymmetry between enterprises and investors,enhance the supervision function of institutional investors,and ultimately promote the technological innovation output of enterprises.Second,the institutional investors promote the technological innovation output of the invested enterprises by improving the internal control environment.Through the general meeting of shareholders,the board of directors and the board of supervisors,the institutional investors actively participate in the corporate governance,strengthen the back control environment of the invested enterprises,guide the enterprise management to actively exercise the management responsibility,enhance the investment in research and development,and improve the output of technological innovation.The innovation points are as follows: first,the principal-agent theory,shareholder activism theory and signaling theory are incorporated into the research framework to systematically explain the influence mechanism of institutional investors' shareholding on the technological innovation output of enterprises;Second,after analyzing the impact of institutional investors on the corporate technological innovation output,this paper analyzes the role of market environment in the influence of institutional investors on the corporate technological innovation output.Third,from the internal and external factors,this paper explores the degree of information uncertainty and the internal control environment are the ways that institutional investors affect the output of technological innovation.The results contribute to the existing researches on the institutional investors and technological innovation output.