Ownership Heterogeneity and Corporate Innovation Output: A Study on Family Blockholders and Activist Hedge Funds

Matthias Leute; Yannick Bammens; Martin Carree; Jolien Huybrechts

doi:10.1177/08944865231168918

Ownership Heterogeneity and Corporate Innovation Output: A Study on Family Blockholders and Activist Hedge Funds

Matthias Leute, Yannick Bammens^*, Martin Carree, Jolien Huybrechts

^*Corresponding author for this work

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

Abstract

This study examines the interplay between two influential yet opposing shareholder types-family blockholders and hedge funds-in relation to corporate innovation output. Using panel data on U.S. publicly traded firms listed in the S&P 1500, we find that family blockholders have a negative effect on radical innovation output in the form of citation-weighted patents and that this negative effect is intensified in the presence of activist hedge funds. Our study advances insight into the implications of ownership heterogeneity for innovation output choices in family-influenced firms.

Original language	English
Pages (from-to)	254-280
Number of pages	27
Journal	family business review
Volume	36
Issue number	2
DOIs	https://doi.org/10.1177/08944865231168918
Publication status	Published - 1 Jun 2023

Keywords

family ownership
institutional ownership
hedge funds
innovation
behavioral agency model
MULTIPLE-AGENCY CONFLICTS
MYOPIC LOSS AVERSION
SOCIOEMOTIONAL WEALTH
BEHAVIORAL AGENCY
DEVELOPMENT INVESTMENTS
TECHNOLOGICAL-INNOVATION
LARGE SHAREHOLDERS
FIRM PERFORMANCE
PROSPECT-THEORY
VALUE CREATION

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10.1177/08944865231168918

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title = "Ownership Heterogeneity and Corporate Innovation Output: A Study on Family Blockholders and Activist Hedge Funds",

abstract = "This study examines the interplay between two influential yet opposing shareholder types-family blockholders and hedge funds-in relation to corporate innovation output. Using panel data on U.S. publicly traded firms listed in the S&P 1500, we find that family blockholders have a negative effect on radical innovation output in the form of citation-weighted patents and that this negative effect is intensified in the presence of activist hedge funds. Our study advances insight into the implications of ownership heterogeneity for innovation output choices in family-influenced firms.",

keywords = "family ownership, institutional ownership, hedge funds, innovation, behavioral agency model, MULTIPLE-AGENCY CONFLICTS, MYOPIC LOSS AVERSION, SOCIOEMOTIONAL WEALTH, BEHAVIORAL AGENCY, DEVELOPMENT INVESTMENTS, TECHNOLOGICAL-INNOVATION, LARGE SHAREHOLDERS, FIRM PERFORMANCE, PROSPECT-THEORY, VALUE CREATION",

author = "Matthias Leute and Yannick Bammens and Martin Carree and Jolien Huybrechts",

note = "data source: data obtained after merging several secondary data sources (e.g., Compustat, FactSet, Governance Metrics International [GMI] ratings, the United States Patent and Trademark Office [USPTO])",

year = "2023",

month = jun,

day = "1",

doi = "10.1177/08944865231168918",

language = "English",

volume = "36",

pages = "254--280",

journal = "family business review",

issn = "0894-4865",

publisher = "SAGE Publications Inc.",

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T1 - Ownership Heterogeneity and Corporate Innovation Output: A Study on Family Blockholders and Activist Hedge Funds

AU - Leute, Matthias

AU - Bammens, Yannick

AU - Carree, Martin

AU - Huybrechts, Jolien

N1 - data source: data obtained after merging several secondary data sources (e.g., Compustat, FactSet, Governance Metrics International [GMI] ratings, the United States Patent and Trademark Office [USPTO])

PY - 2023/6/1

Y1 - 2023/6/1

N2 - This study examines the interplay between two influential yet opposing shareholder types-family blockholders and hedge funds-in relation to corporate innovation output. Using panel data on U.S. publicly traded firms listed in the S&P 1500, we find that family blockholders have a negative effect on radical innovation output in the form of citation-weighted patents and that this negative effect is intensified in the presence of activist hedge funds. Our study advances insight into the implications of ownership heterogeneity for innovation output choices in family-influenced firms.

AB - This study examines the interplay between two influential yet opposing shareholder types-family blockholders and hedge funds-in relation to corporate innovation output. Using panel data on U.S. publicly traded firms listed in the S&P 1500, we find that family blockholders have a negative effect on radical innovation output in the form of citation-weighted patents and that this negative effect is intensified in the presence of activist hedge funds. Our study advances insight into the implications of ownership heterogeneity for innovation output choices in family-influenced firms.

KW - family ownership

KW - institutional ownership

KW - hedge funds

KW - innovation

KW - behavioral agency model

KW - MULTIPLE-AGENCY CONFLICTS

KW - MYOPIC LOSS AVERSION

KW - SOCIOEMOTIONAL WEALTH

KW - BEHAVIORAL AGENCY

KW - DEVELOPMENT INVESTMENTS

KW - TECHNOLOGICAL-INNOVATION

KW - LARGE SHAREHOLDERS

KW - FIRM PERFORMANCE

KW - PROSPECT-THEORY

KW - VALUE CREATION

U2 - 10.1177/08944865231168918

DO - 10.1177/08944865231168918

M3 - Article

SN - 0894-4865

VL - 36

SP - 254

EP - 280

JO - family business review

JF - family business review

IS - 2

ER -

Ownership Heterogeneity and Corporate Innovation Output: A Study on Family Blockholders and Activist Hedge Funds

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Keywords

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