The influence of activism by institutional investors on R&D

Researchers have assumed that large ownership stakes held by institutional investors grant them power to influence R&D investments, We found that owne rship alone was insufficient and that institutions resorted to activism to influence R&D investments. Institutional activism increased R&D inputs over both the short and long terms. The nature of the activism and the strategi c context of the R&D investment moderated the relationship. Further, R&D in puts mediated the effect of activism on R&D outputs.