Conflicting Voices: The Effects of Institutional Ownership Heterogeneity and Internal Governance on Corporate Innovation Strategies

2002 ◽  
Vol 45 (4) ◽  
pp. 697-716 ◽  
Author(s):  
Robert E. Hoskisson ◽  
Michael A. Hitt ◽  
Richard A. Johnson ◽  
Wayne Grossman
Keyword(s):  
Institutional Ownership ◽  
Internal Governance ◽  
Corporate Innovation ◽  
Innovation Strategies

Institutional investor preferences

2019 ◽  
Vol 42 (5) ◽  
pp. 641-659 ◽  
Author(s):  
Hamdan Amer Al-Jaifi ◽  
Ahmed Hussien Al-Rassas ◽  
Adel Al-Qadasi
Keyword(s):  
Institutional Investors ◽  
Audit Committee ◽  
Internal Audit ◽  
Institutional Ownership ◽  
Governance Mechanisms ◽  
Internal Governance ◽  
Content Type ◽  
Internal Audit Function ◽  
Internal Governance Mechanisms ◽  
Emerging Country

Purpose This study aims to examine the institutional investors’ preferences for internal governance mechanisms (internal audit function and audit committee effectiveness) in an emerging country like Malaysia. Design/methodology/approach A sample of 2,020 yearly firm observations in Bursa Malaysia over the period 2009-2012 is used. The two-stage least squares using instrumental variables (IV-2SLS) analysis is used to examine the relationships. To corroborate the findings of this study, a regression based on a one-year lag of the independent variables is used. Furthermore, ordinary least square regression and Generalized Method of Moments using instrumental variables (IV-GMM) are used. Findings Positive associations are found between the internal audit function and audit committee effectiveness and the institutional ownership. Research limitations/implications These findings imply that institutional investors gravitate to firms that have high investment in internal audit function and effective audit committee. These findings are consistent with the conjecture that institutional investors try to minimize monitoring and exit costs and meet their fiduciary responsibility by investing in better internal audit firms. Practical implications This study offers insights to policymakers interested in enhancing internal governance mechanisms to attract institutional investors. Originality/value Limited empirical studies have examined the relation between internal governance mechanisms (internal audit function and audit committee effectiveness) and institutional ownership. This study adds to the existing literature on the importance of internal governance mechanisms by documenting an association between internal audit function and audit committee effectiveness and institutional ownership in an emerging country like Malaysia.

The Relationship Between Institutional Ownership and Corporate Innovation: A Meta-Analysis

2020 ◽  
Vol 2020 (1) ◽  
pp. 10362
Author(s):  
Sergio Canavati ◽  
Jong-Min Oh ◽  
Dirk Libaers ◽  
Tang Wang
Keyword(s):  
Meta Analysis ◽  
Institutional Ownership ◽  
Corporate Innovation ◽  
The Relationship

Top Management Human Capital, Inventor Mobility, and Corporate Innovation

2018 ◽  
Vol 54 (6) ◽  
pp. 2383-2422 ◽  
Author(s):  
Thomas J. Chemmanur ◽  
Lei Kong ◽  
Karthik Krishnan ◽  
Qianqian Yu
Keyword(s):  
Factor Analysis ◽  
Important Determinant ◽  
Common Factor ◽  
Quality Measures ◽  
Top Management ◽  
Management Quality ◽  
Input And Output ◽  
Corporate Innovation ◽  
Innovation Output ◽  
Innovation Strategies

Using panel data on top management characteristics and a management quality factor constructed using common factor analysis on individual management quality measures, we analyze the relation between top firm management quality and corporate innovation input and output. We show that top management quality is an important determinant of corporate innovation, with individual aspects of management quality affecting innovation in younger and older firms differently. Further, firms with higher top management quality engage in more risky (“explorative”) innovation strategies. Finally, hiring more and higher-quality inventors is an important channel through which firms with higher management quality achieve greater innovation output.

When Do Governance Mechanisms Matter Most?

2020 ◽  
Vol 10 (01) ◽  
pp. 2050003
Author(s):  
Derek Horstmeyer ◽  
Kara Wells
Keyword(s):  
Institutional Ownership ◽  
Economic Conditions ◽  
Shareholder Rights ◽  
Governance Mechanisms ◽  
Firm Level ◽  
Internal Governance ◽  
State Dependent ◽  
Economic State ◽  
External Governance ◽  
Excessive Compensation

We examine the interaction of internal and external firm-level governance mechanisms with industry-specific economic conditions to assess when they best serve current shareholders. We find that external governance (shareholder rights) is most valuable during industry upturns, with no differential benefit during downturns. For internal governance, we find that small boards are incrementally more valuable during upturns but that this result weakens/reverses during downturns, and there is inconclusive evidence regarding the state dependent value of institutional ownership. Contributions include showing: governance mechanisms have industry economic state dependent values; small boards may not always be optimal; and managers do not capture these inefficiencies through aggressive policy decisions, nor excessive compensation.

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