CONFLICTING VOICES: THE EFFECTS OF INSTITUTIONAL OWNERSHIP HETEROGENEITY AND INTERNAL GOVERNANCE ON CORPORATE INNOVATION STRATEGIES.

Abstract
Examining the relationship between governance and corporate innovation strategies, we found, in opposition to the assumption that owners have a unified voice, differences among governance constituencies' preferences for corporate innovation strategies. The managers of public pension funds preferred internal innovation, but professional investment funds' managers preferred acquiring external innovation. The profiles of boards of directors also shaped these innovation strategies. Inside directors with equity emphasized internal innovation, and outside directors with equity emphasized external innovation. The two types of fund manager equally preferred boards composed of outsider representatives with equity. However, pension fund managers preferred inside directors with equity more strongly than did professional investment fund owners.

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