Shareholder Coordination and Corporate Innovation

Authors

Ani Manakyan Mathers, Salisbury University
Bin Wang, Marquette UniversityFollow
Xiaohong Wang, Northeastern Illinois University

Document Type

Article

Publication Date

5-2020

Publisher

Wiley

Source Publication

Journal of Business Finance & Accounting

Source ISSN

0306-686X

Original Item ID

10.1111/jbfa.12433

Abstract

We show that greater shareholder coordination, as proxied by the geographic proximity between institutional investors, is positively related to corporate innovation outcomes. This relationship is driven by coordination among dedicated and independent institutions who have strong monitoring incentives and is more pronounced among firms with lower blockholder ownership and greater information asymmetry where there is greater benefit to monitoring. We propose that shareholder coordination promotes corporate innovation through a reduction in managerial agency problems. Overall, our results are consistent with the notion that greater shareholder coordination enables diffuse shareholders to monitor managers more effectively and enhances corporate innovation.

Comments

Accepted version. Journal of Business Finance & Accounting, Vol. 47, No. 5-6 (May/June 2020): 730-759. DOI. © 2020 Wiley. Used with permission.

Recommended Citation

Manakyan Mathers, Ani; Wang, Bin; and Wang, Xiaohong, "Shareholder Coordination and Corporate Innovation" (2020). Finance Faculty Research and Publications. 159.
https://epublications.marquette.edu/fin_fac/159