Does passive investment have a positive governance effect? Evidence from index funds ownership and corporate innovation

Autor:	Lili Fu, Fengyun Wu, Liyuan Pan
Rok vydání:	2021
Předmět:	Economics and Econometrics 050208 finance Corporate governance 05 social sciences Institutional investor Financial system Passive management Index fund Inventory turnover Shareholder 0502 economics and business Business 050207 economics Marketization Empirical evidence Finance
Zdroj:	International Review of Economics & Finance. 75:524-545
ISSN:	1059-0560
DOI:	10.1016/j.iref.2021.04.025
Popis:	Using Chinese listed companies' data from 2007 to 2017, this study finds that companies with a higher proportion of index fund ownership are more innovative, implying that passive institutional investors positively influence company governance. The effect is stronger in private firms, high-tech firms, and firms in high marketization regions and prominent mainly in large-cap index funds. Index fund ownership reduces the stock turnover rate, stabilizes shareholder structure, and lowers managers turnover rates, mitigating managers’ myopic behavior and boosting innovation. This study documents empirical evidence on the positive effect of passive investors on corporate governance from the perspective of corporate innovation.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::4f5ed93a0852d29ea113171fddd17771 https://doi.org/10.1016/j.iref.2021.04.025 Zobrazit plný text záznamu Full Text from ScienceDirect