This study examines the relationship between ownership structures in large European companies and their innovative activity in terms of R&D spending. The analysis is performed on a sample of 324 large innovative companies over 8 years. Contrary to the view that institutional investors can have a negative influence on R&D spending, we report a positive impact of these investors. Our study also tests the impact of 'impatient' institutional investors and provides evidence of their negative influence on R&D spending.

This article investigates the geography of finance through a study of the behavior of large equity investors who are key actors in capitalism. The main argument is based on their expectations in "finance-driven" capitalism: large equity investors require high returns on invested capital in a shorter time and are said to be impatient. The article focuses on their portfolio turnover in relation to geographic factors and their attachment to a specific model of capitalism. The U.S. "market-based" model is presented as a benchmark, since U.S. investors trade securities most frequently relative to other international equity investors. Our empirical findings on the proximity of investors in various models of capitalism with U.S. "impatient" investors contribute to a growing literature on the economic importance of geography in understanding global finance. Copyright (c) 2010 Clark University.

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