TY - JOUR
T1 - How do foreign institutional investors enhance firm innovation?
AU - Luong, Luong Hoang
AU - Moshirian, Fariborz
AU - Nguyen, Lily
AU - Tian, Xuan
AU - Zhang, Bohui
PY - 2017/8
Y1 - 2017/8
N2 - We examine the effect of foreign institutional investors on firm innovation. Using firm-level data across 26 non-U.S. economies between 2000 and 2010, we show that foreign institutional ownership has a positive, causal effect on firm innovation. We further explore three possible underlying mechanisms through which foreign institutions affect firm innovation: Foreign institutions act as active monitors, provide insurance for firm managers against innovation failures, and promote knowledge spillovers from high-innovation economies. Our article sheds new light on the real effects of foreign institutions on firm innovation.
AB - We examine the effect of foreign institutional investors on firm innovation. Using firm-level data across 26 non-U.S. economies between 2000 and 2010, we show that foreign institutional ownership has a positive, causal effect on firm innovation. We further explore three possible underlying mechanisms through which foreign institutions affect firm innovation: Foreign institutions act as active monitors, provide insurance for firm managers against innovation failures, and promote knowledge spillovers from high-innovation economies. Our article sheds new light on the real effects of foreign institutions on firm innovation.
UR - http://www.scopus.com/inward/record.url?scp=85026557248&partnerID=8YFLogxK
U2 - 10.1017/S0022109017000497
DO - 10.1017/S0022109017000497
M3 - Article
VL - 52
SP - 1449
EP - 1490
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
SN - 0022-1090
IS - 4
ER -