Replication data for: Exploration, Competition, Institutional Ownership

The predominance of Institutional ownership among major firms raises concerns about their innovative outcomes. In this paper we show that greater institutional ownership is not only positively associated to higher levels of innovative output, but is also positively associated with the number of patents that receive a very high number of future citations, i.e. those in the top decile of the citation distribution. This gives partial support to the idea that the type of innovation pursued by firms with higher institutional ownership is of explorative type. These results hold also when a log-linear two-stage least squares regression is used to identify causal effect. Moreover, we found that the interaction of institutional ownership with competition has an inverted-U shaped effect on innovation. In this way, both the “career concern” and the “lazy manager” theories are justified and intertwine