We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
Role of Foreign and Domestic Institutional Investors in Corporate Sustainability: Focusing on R&D Investment.
- Authors
Shin, Ilhang; Park, Sorah
- Abstract
This paper examines the effects of ownership by foreign and domestic institutional investors on corporate sustainability by focusing on the level of research and development (R&D) investment. Long-term investment in R&D is crucial for companies that seek to generate sustainable growth. Ordinary least-squares regression is performed on a sample of Korean listed companies. The main test with both foreign and domestic institutional ownership is based on a study period from 2001 to 2004. The results indicate that firms with higher levels of foreign institutional ownership exhibit greater levels of corporate R&D activities, while the ownership by domestic institutions has no significant influence on firms' R&D investment. An additional test with foreign institutional ownership data is based on an extended study period from 2001 to 2014, and shows that foreign institutional ownership is positively related to firms' R&D investment. This result survives the two-stage instrumental variable approach used to address endogeneity factors in foreign institutional ownership. Taken together, these findings suggest that foreign institutions can effectively monitor managerial myopia and promote corporate innovations.
- Subjects
INSTITUTIONAL investors; CORPORATE sustainability; INSTITUTIONAL ownership (Stocks); INSTRUMENTAL variables (Statistics); INVESTMENTS; BUSINESS expansion
- Publication
Sustainability (2071-1050), 2020, Vol 12, Issue 20, p8754
- ISSN
2071-1050
- Publication type
Article
- DOI
10.3390/su12208754