Year of Graduation
The Impact of Institutional Ownership on R&D Investments of the Company
Strategic Corporate Finance
In this study, we analyze the relationship between institutional ownership and firm’s R&D intensity. In contrast to prior research, we examine institutional influence on R&D at the level of each type of institutional investors. This approach is introduced both to avoid bias in classification of investors by their potential attitude towards R&D and to find new evidence on particular issues, which have not been covered yet. Our research methodology allows us to observe the separate influence of different types of institutional investors on R&D, controlling for the factors of dominant ownership position, and investment horizon of owners. Additionally, we control for the moderating effect of investment opportunities and technological intensiveness of industries on the direction and power of institutional investors’ influence on R&D. We succeeded to obtain the empirical evidence on the attitude of institutional investors towards R&D under different conditions and to clarify the factors, which are crucial for this relationship.