We analyze the role of common equity blockholders in fostering the formation of strategic alliances, establish a positive causal effect of strategic alliances on corporate innovation, and analyze the channels through which strategic alliances foster innovation. Our findings may be summarized as...

Using an instrumental variable approach that exploits an exogenous variation of passive institutional ownership caused by Russell 1000/2000 index reconstitution, we find that greater passive institutional ownership leads to improvement in corporate innovation measured by patent quantity and...