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Hedge fund ownership and the innovation of high-tech firms: Evidence from the Science and technology innovation board in China

Author

Listed:
  • Li, Lu
  • Li, Yang
  • He, Yuqian
  • Chen, Yishu

Abstract

High-tech firms stand apart from traditional firms due to their emphasis on innovation. This paper provides empirical evidence indicating new mechanisms through which hedge fund holdings enhances innovation of high-tech firms listed on the Science and Technology Innovation Board in China. Different from that of traditional firms, this paper finds that hedge fund ownership enhances innovation output by increasing innovation input and improving innovation efficiency of high-tech firms in China. The positive relationship is especially evident among firms with long-term holdings by hedge funds, low agency costs, a high degree of equity checks and balances, and those that are privately held enterprises.

Suggested Citation

  • Li, Lu & Li, Yang & He, Yuqian & Chen, Yishu, 2023. "Hedge fund ownership and the innovation of high-tech firms: Evidence from the Science and technology innovation board in China," Economics Letters, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:ecolet:v:233:y:2023:i:c:s0165176523004469
    DOI: 10.1016/j.econlet.2023.111420
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    More about this item

    Keywords

    Hedge fund ownership; Innovation; High-tech firms;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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