摘要：We find that institutional ownership in publicly traded companies is associated
with more innovation (measured by cite-weighted patents). To explore the
mechanism through which this link arises, we build a model that nests the
lazy-manager hypothesis with career-concerns, where institutional owners
increase managerial incentives to innovate by reducing the career risk of risky
projects. The data supports the career concerns model. First, whereas the lazy
manager hypothesis predicts a substitution effect between institutional
ownership and product market competition (and managerial entrenchment
generally), the career-concern model allows for complementarity. Empirically, we
reject substitution effects. Second, CEOs are less likely to be fired in the
face of profit downturns when institutional ownership is higher. Finally, using
instrumental variables, policy changes and disaggregating by type of owner we
find that the effect of institutions on innovation does not appear to be due to
endogenous selection.
关键词：Innovation, institutional ownership, career concerns, R&D, productivity
