Facilitator or figurehead? The impact of academician shareholder on corporate innovation: Evidence from China

Abstract

Investment by academicians with resource advantages can serve as a vital channel for promoting innovation. In this study, we investigate whether and how academician shareholders who are esteemed fellows or candidates of the Chinese Academy of Sciences and the Chinese Academy of Engineering impact corporate innovation. Using a sample from China, we document a positive association between academician shareholders and corporate innovation. Our channel analysis reveals four potential channels through which academician shareholders promote corporate innovation: innovative human capital, investor protection, top management team attention to innovation and reduction in innovation uncertainty. Moreover, in line with the resource-based view and incomplete contract theory, our findings indicate that the positive association is more pronounced in firms with directors appointed by academician shareholders, without state ownership, and with multiple large shareholders. Finally, our findings indicate that academician shareholders can enhance open innovation, attract government subsidies, shorten the time it takes for corporate patent applications to be granted, and improve firm performance.