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Do company visits by institutional investors mitigate managerial myopia in R&D investment? : evidence from China

  • Yonggen Luo
  • , Huiying Wu
  • , Sammy Xiaoyan Ying
  • , Qiuping Peng

Research output: Contribution to journalArticlepeer-review

29 Citations (Scopus)

Abstract

This study investigates the effects of company visits by institutional investors on managerial myopia about investment in research and development (R&D) in China. We find that company visits increase R&D spending. We also find that this increase is more pronounced for companies that have an entrenched chief executive officer (CEO), as indicated by longer CEO tenure and CEO duality, and for companies that face less intense market competition. The results further show that the increase in R&D spending is more pronounced for companies that have larger institutional ownership, are invested by long-term oriented institutions, are in the high-tech industry, and are state owned. These findings attest to the governance role of institutional investors.
Original languageEnglish
Article number100694
Number of pages25
JournalGlobal Finance Journal
Volume51
DOIs
Publication statusPublished - Feb 2022

Bibliographical note

Publisher Copyright:
© 2021 Elsevier Inc.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 9 - Industry, Innovation, and Infrastructure
    SDG 9 Industry, Innovation, and Infrastructure

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