We present evidence that spatially concentrated institutional investors enhance corporate innovation. These investors can coordinate more efficiently, leading to lower turnover of the holding firms’ stocks and more diversified portfolios, which enables the holding firms to increases corporate risk-taking and focus more on long-term investments. Consistent with this argument, we find that firms with spatially concentrated investors take higher risk, invest more heavily in innovative projects, generate more patents, and have more patent citations. Our results are robust to using instrumental variables and the introduction of a new airline route as an exogenous shock to spatial concentration among institutional investors.

中文翻译：

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制度空间集中的真实影响

我们提供的证据表明，空间集中的机构投资者增强了企业创新。这些投资者可以更有效地协调，从而降低控股公司股票的换手率和更多样化的投资组合，从而使控股公司能够增加企业风险承担并更加专注于长期投资。与这一论点一致，我们发现投资者空间集中的公司承担更高的风险，更多地投资于创新项目，产生更多的专利，并拥有更多的专利引用。我们的结果对于使用工具变量和引入新航线作为对机构投资者空间集中度的外生冲击是稳健的。