A Study on the Impact of Institutional Investors on Corporate Dual Innovation Investment

Zhang Yuqing

School of Business, Xi'an International Studies University

Abstract：

Strengthening the role of enterprises as the primary drivers of technological innovation is key to promoting high-quality economic development. As significant players in the capital market, institutional investors have sparked discussion regarding how their equity holdings influence corporate innovation strategies. Based on the dual innovation theory, this study distinguishes corporate innovation investment into exploratory innovation and developmental innovation, and classifies institutional investors into stable and transactional types. Using a sample of Chinese A-share listed companies from 2014 to 2023, the study empirically examines the impact of holdings by heterogeneous institutional investors on firms’ dual innovation investment. The findings reveal that institutional investor holdings promote firms’ dual-track innovation investment, with a more pronounced effect on exploratory innovation investment; compared to transactional institutional investors, stable institutional investors have a more significant impact on promoting firms’ innovation investment; and holdings by stable institutional investors are more effective in promoting exploratory innovation investment. This study provides insights for firms to optimize the allocation of innovation resources and select appropriate innovation pathways.

Key Words：

corporate dual-track innovation; institutional investor holdings; heterogeneous institutional investors