The Impact Of Institutional Ownership On Enterprise Innovation

With the rapid development of China’s economy,on the one hand,The labor cost advantage of China is gradually fading.Compared with the labor cost of China,which is gradually rising,the labor cost of Southeast Asia,mainly Malaysia,Vietnam and other ASEAN member countries,gradually dominates in the world market competition.Xi Jinping,on the other hand,the general secretary in 2013 put forward the concept of "new normal" economy era background,is the extensive growth mode of China’s economy ever has been the fact that can’t continue to support its rapid growth,and the "new normal" core principles is gradually changing the driving mode of China’s economy,driven by the elements of past,investment-driven to innovation-driven.It is against this background that Premier Li Keqiang first put forward the call of "mass entrepreneurship and innovation" to realize the innovation-driven transformation of China’s economic growth pattern.At the same time,with the continuous development and maturity of China’s capital market,the corresponding laws and regulations and exchange system continue to improve,after the reform of non-tradable shares in 2005,China’s stock liquidity has been greatly improved.Since then,equity liquidity has fallen sharply for a period due to the global financial crisis of 2008 and the stock price crash of 2015.However,due to the national emergency regulation policies,such as the "four trillion plan" and a period of relatively loose monetary policy,as well as the passive "monetary easing" brought about by China’s long-term trade surplus,on the whole,the stock liquidity of China’s capital market is good and in a rising state.What is more noteworthy is that "expanding the scope of opening up of the service industry,greatly relaxing the market access standards,and promoting the formation of a new pattern of all-round opening up",indicating that further opening up of China’s financial industry is the general trend of The Times.In addition,according to the Basic Pension Fund Investment Management Measures(issued by The State Council on August 23,2015),on the premise that the total proportion of equity product investment meets certain conditions,pension funds can participate in stock market investment.Based on the above background discussion on the development of Institutional investors in China: On the one hand,to speed up financial opening to the outside world,market will have important institutional investors,it is reasonable to foresee,In the future,the quantity and quality of institutional investors will usher in a new improvement.Stake in this background,research institutions,especially the investment horizon of different institutional investors holding the different influence to the enterprise innovation may exist,and accordingly put forward based on the type of incentive enterprise innovation under the perspective of institutional investors guidance and cultivation culture and institutional investors long-term investments and talent employment related policy Suggestions,for through market means to promote enterprise technology innovation,It is of great practical significance to complete the innovation-driven transformation of China’s economic growth pattern.This paper takes China’s A-share listed companies from 2016 to 2020 as research samples to analyze the impact of institutional ownership,especially the ownership of institutional investors with different investment terms,on enterprise innovation behavior and its internal mechanism.The final conclusions are as follows :(1)under certain other conditions,total institutional ownership has a restraining effect on enterprise innovation;(2)Ownership by institutional investors with different investment terms has different impacts on enterprise innovation.Specifically,under certain other conditions,long-term institutional ownership significantly promotes firm innovation,while short-term institutional ownership significantly inhibits firm innovation.(3)Stock liquidity channel is one of the mechanisms by which institutional ownership influences firm innovation.Based on relevant policies and institutional investors.For the purpose of supporting and encouraging enterprise innovation,the government should attach importance to the guidance and development of long-term institutional investors,including Qualified foreign Institutional investors,insurance and social security funds.Although short-term institutional investors face great performance pressure,they should better balance the advantages and disadvantages of short-term pressure and long-term high returns.This paper has at least the following innovation points: First,in the case that there is no consensus on whether institutional shareholding promotes or inhibits enterprise innovation,theoretical analysis and empirical research are carried out to provide the latest basis for the discussion of this issue.Secondly,this paper theoretically analyzes and empirically examines the stock liquidity channel of institutional shareholding affecting firm innovation,which is seldom paid attention to by existing literature,and makes up for the deficiency of existing literature.Finally,on the basis of the overall research on institutional ownership and enterprise innovation,further theoretical and empirical analysis is conducted to find and explain the different impacts of institutional investors with different investment terms on enterprise innovation,which enricifies the research on the impact of institutional ownership on enterprise innovation and other related issues...