We examine whether institutional investors with short-term incentives affect firms' innovation performance. We find … innovation performance, as measured by patents and citations. To address potential endogeneity, we exploit the positive liquidity … concentrated short-term investors are less likely to engage in explorative innovation. We nevertheless also find that the negative …

This study documents a positive and robust effect of co-opted boards on firm innovation. This effect is mainly driven … of CEO pay-performance and turnover-performance. It suggests that co-opted boards promote innovation by insulating … managers' career concerns from innovation risk and supporting incentive contracts that motivate innovation. Overall, our study …