Institutional ownership and technological relatedness: A test of endogeneity
Building on the previous literature on corporate diversification, institutional ownership and firm innovation, this study proposes an endogenous relationship between institutional ownership and corporate technological relatedness. Technological relatedness is the degree to which a set of industries in which a firm operates its businesses demand similar technological knowledge. A Vector Autoregressive analysis of data from U.S. manufacturing firms shows that firms enhancing technological relatedness attract more institutional investors and as predicted, this pattern is particularly strong for pension fund ownership. In contrast, the analysis fails to show that institutional investors cause a firm's business portfolio to increase in technological relatedness.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marciukaityte, Dalia & Varma, Raj, 2007. "Institutional investors as suppliers of equity-linked capital: Evidence from privately placed convertible debt," Journal of Business Research, Elsevier, vol. 60(4), pages 357-364, April.
- Khan, Raihan & Dharwadkar, Ravi & Brandes, Pamela, 2005. "Institutional ownership and CEO compensation: a longitudinal examination," Journal of Business Research, Elsevier, vol. 58(8), pages 1078-1088, August.
- Philippe Aghion & John Van Reenen & Luigi Zingales, 2009.
"Innovation and Institutional Ownership,"
NBER Working Papers
14769, National Bureau of Economic Research, Inc.
- Philippe Aghion & John Van Reenen & Luigi Zingales, 2009. "Innovation and institutional ownership," LSE Research Online Documents on Economics 25480, London School of Economics and Political Science, LSE Library.
- Aghion, Philippe & Van Reenen, John & Zingales, Luigi, 2009. "Innovation and Institutional Ownership," CEPR Discussion Papers 7195, C.E.P.R. Discussion Papers.
- Zingales, Luigi & Reenen, John Van & Aghion, Philippe, 2009. "Innovation and Institutional Ownership," Scholarly Articles 4481491, Harvard University Department of Economics.
- Philippe Aghion & John Van Reenen & Luigi Zingales, 2009. "Innovation and Institutional Ownership," CEP Discussion Papers dp0911, Centre for Economic Performance, LSE.
- Philippe Aghion & John Van Reenen & Luigi Zingales, 2010. "Innovation and Institutional Ownership," Working Papers 2010.99, Fondazione Eni Enrico Mattei.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992.
"Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?,"
Journal of Econometrics,
Elsevier, vol. 54(1-3), pages 159-178.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
- Kane, Gregory D. & Velury, Uma, 2004. "The role of institutional ownership in the market for auditing services: an empirical investigation," Journal of Business Research, Elsevier, vol. 57(9), pages 976-983, September.
- Wu, Jianfeng & Tu, Rungting, 2007. "CEO stock option pay and R&D spending: a behavioral agency explanation," Journal of Business Research, Elsevier, vol. 60(5), pages 482-492, May.
- Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
- Ritter, Thomas & Gemunden, Hans Georg, 2004. "The impact of a company's business strategy on its technological competence, network competence and innovation success," Journal of Business Research, Elsevier, vol. 57(5), pages 548-556, May.
- Grabowski, Henry G & Mueller, Dennis C, 1972. "Managerial and Stockholder Welfare Models of Firm Expenditures," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 9-24, February.
- Dolado, Juan J & Jenkinson, Tim & Sosvilla-Rivero, Simon, 1990. " Cointegration and Unit Roots," Journal of Economic Surveys, Wiley Blackwell, vol. 4(3), pages 249-73.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Cherian Samuel, 2000. "Does shareholder myopia lead to managerial myopia? A first look," Applied Financial Economics, Taylor & Francis Journals, vol. 10(5), pages 493-505.
- Falkenstein, Eric G, 1996. " Preferences for Stock Characteristics as Revealed by Mutual Fund Portfolio Holdings," Journal of Finance, American Finance Association, vol. 51(1), pages 111-35, March.
- Brickley, James A. & Lease, Ronald C. & Smith, Clifford Jr., 1988. "Ownership structure and voting on antitakeover amendments," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 267-291, January.
- John, Kose & Ofek, Eli, 1995. "Asset sales and increase in focus," Journal of Financial Economics, Elsevier, vol. 37(1), pages 105-126, January.
- Marnik G. Dekimpe & Dominique M. Hanssens, 1995. "The Persistence of Marketing Effects on Sales," Marketing Science, INFORMS, vol. 14(1), pages 1-21.
- Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
- Comment, Robert & Jarrell, Gregg A., 1995. "Corporate focus and stock returns," Journal of Financial Economics, Elsevier, vol. 37(1), pages 67-87, January.
- Mitra, Santanu & Hossain, Mahmud, 2007. "Ownership composition and non-audit service fees," Journal of Business Research, Elsevier, vol. 60(4), pages 348-356, April.
- Eakins, Stanley G. & Stansell, Stanley R. & Wertheim, Paul E., 1998. "Institutional portfolio composition: An examination of the prudent investment hypothesis," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(1), pages 93-109.
- Berger, Philip G & Ofek, Eli, 1999. "Causes and Effects of Corporate Refocusing Programs," Review of Financial Studies, Society for Financial Studies, vol. 12(2), pages 311-45.
- Le, Son Anh & Walters, Bruce & Kroll, Mark, 2006. "The moderating effects of external monitors on the relationship between R&D spending and firm performance," Journal of Business Research, Elsevier, vol. 59(2), pages 278-287, February.
- Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-77, December.
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:66:y:2013:i:11:p:2279-2286. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.