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What types of bondholders impede corporate innovative activities?
- Publication Year :
- 2013
- Publisher :
- Helsinki: Bank of Finland, 2013.
-
Abstract
- This study investigates whether institutional bond blockholders (i.e., bond funds that hold more than 5% of a firm's outstanding bonds) impede firm innovative activities, and if they do, through which channels. We find that long-term bond blockholders do not discourage firms from conducting innovative activities. Short-term bond blockholders, however, significantly reduce both firm investments in R&D and the innovative quality of these investments. Furthermore, their negative impact is stronger than the negative impact of short-term stockholders. Our results cannot be fully explained by short-term bondholders' a priori investment preferences and are robust to possible endogeneity concerns. Overall, they suggest that the option of the 'Wall Street walk' allows bondholders to exert considerable influence on firms' risk-taking decisions.
- Subjects :
- Wall Street Walk
Investment Horizon
Bondholder
ddc:330
G31
G23
Innovation
Subjects
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.od......1687..06aa7cd2665d0c0543801d0c21e2e3d9