Abstract
AbstractWe present evidence that spatially concentrated institutional investors enhance corporate innovation. These investors can coordinate more efficiently, leading to lower turnover of the holding firms’ stocks and more diversified portfolios, which enables the holding firms to increases corporate risk‐taking and focus more on long‐term investments. Consistent with this argument, we find that firms with spatially concentrated investors take higher risk, invest more heavily in innovative projects, generate more patents, and have more patent citations. Our results are robust to using instrumental variables and the introduction of a new airline route as an exogenous shock to spatial concentration among institutional investors.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
