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Institutional investor stability, executive equity incentives, and corporate innovation

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  • Jia, Haoyi
  • Che, Weina

Abstract

This study utilizes financial data from listed companies between 2013 and 2022 to examine the relationship between institutional investor stability and corporate innovation. The results indicate that institutional investor stability enhances corporate innovation levels. This positive effect exhibits heterogeneity across firms with varying levels of managerial control and different scales. Furthermore, institutional investor stability promotes corporate innovation by increasing executive equity incentives, while the increase in agency costs weakens the positive effect of institutional investor stability on corporate innovation.

Suggested Citation

  • Jia, Haoyi & Che, Weina, 2025. "Institutional investor stability, executive equity incentives, and corporate innovation," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s154461232500950x
    DOI: 10.1016/j.frl.2025.107691
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    References listed on IDEAS

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    Cited by:

    1. Yan, Yufei & Tan, Linfang & Peng, Junxian, 2025. "Restraint or guidance? The impact of institutional investors' herding behavior on firm innovation," Finance Research Letters, Elsevier, vol. 85(PE).

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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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