The effect of institutional ownership and ownership dispersion on eco-innovation

By Isabel‐María García‐Sánchez, Cristina Aibar‐Guzmán, Beatriz Aibar‐Guzmán. Technological forecasting & social change, 2020

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Abstract This paper aims to determine the role that the different institutional investors play in promoting eco-innovation, focusing on the analysis of the corrective or enhancing effect that can be derived from ownership dispersion related to the participation in a company's stock capital of institutional investors with different time horizons. The results obtained for a sample of 6,454 companies for the period 2002–2017 show the convergence of the short-term institutional investors’ interests with the long-term institutional investors’ demands, which has a positive effect on the implementation of proactive environmental strategies, such as eco-innovation. Additionally, this positive effect is enhanced by disperse ownership structures associated with the participation in a company's stock capital of both types of institutional investors, thereby increasing the firm's commitment to environmental sustainability. Although financial institutions and pension funds diverge from this long-term orientation, seeking an immediate economic return, ownership dispersion allows for correcting their individual negative effect on eco-innovation.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/c6112a6e0477c8e48dac9b845c0f7e1591bd8f41