Hedge Funds and Corporate Innovation

Ying Wang; Jing Zhao

doi:10.1111/fima.12059

Hedge Funds and Corporate Innovation

Ying Wang
, Jing Zhao

Finance

University at Albany

North Carolina State University

Research output: Contribution to journal › Article › peer-review

22 Scopus citations

Abstract

Using National Bureau of Economics Research patent data and hedge fund holdings in US firms from 1998 to 2006, we examine the effect of hedge fund ownership on corporate innovation. We find that hedge fund ownership increases both patent quantity and quality, even after controlling for endogeneity. Hedge funds appear to increase innovation and firm value by increasing research and development (R&D) productivity and innovation efficiency rather than R&D input. Our study suggests another channel through which hedge funds may enhance firm value, contributing to the literature on hedge fund ownership.

Original language	English
Pages (from-to)	353-385
Number of pages	33
Journal	Financial Management
Volume	44
Issue number	2
DOIs	https://doi.org/10.1111/fima.12059
State	Published - Jun 1 2015

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title = "Hedge Funds and Corporate Innovation",

abstract = "Using National Bureau of Economics Research patent data and hedge fund holdings in US firms from 1998 to 2006, we examine the effect of hedge fund ownership on corporate innovation. We find that hedge fund ownership increases both patent quantity and quality, even after controlling for endogeneity. Hedge funds appear to increase innovation and firm value by increasing research and development (R\&D) productivity and innovation efficiency rather than R\&D input. Our study suggests another channel through which hedge funds may enhance firm value, contributing to the literature on hedge fund ownership.",

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Hedge Funds and Corporate Innovation

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