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Influence of the Ownership Structure on the Performance of Innovative Companies in the USA
In recent decades, innovative companies became one of the major driver of economy worldwide. According to surveys, nearly 70% of the world`s most innovative companies in 2017 are U.S. firms. However, academic studies mostly focused on innovativeness of a firm, measuring through R&D spending, patent citation, and have neglected the role of capital structure, ownership structure, and the corporate governance. In this article we analyze the difference between technological and non-technological companies with an attempt to find out a reason of success of fast-growth corporations. This research uses Generalized Least Square model on a sample of 12565 firm-year observations during 2004-2015 period, to justify an assumption that various types of investor have different effects on firm performance of innovative companies. The research reveals the distinction between type of investor and investor`s strategy. By focusing on the ownership concentration we find an evidence that not all types of blockholders improve firm value. In general, our findings suggest that owners with potential business relationship with firms decrease firm value, and passive independent institutions enhance firm performance in virtue of active monitoring and long-term investment horizons. The results further suggest that board composition and CEO characteristics are essential for corporate firm performance of innovative companies. The findings are robust to alternative models and variable selection.