Absence of ultimate controller, risk tolerance, and corporate innovation

This paper focuses on the phenomenon of the absence of an ultimate controller from 2007 to 2018, and discusses the specific impact of the absence of an ultimate controller on corporate innovation from the perspective of managerial risk tolerance. It is found that the R&D investment and innovation outputs in companies without ultimate controllers get significantly increased, which results from the reduction of managers’ risk concerns about innovation failure. The positive correlation between the absence of an ultimate controller and corporate innovation behaviour is more significant in companies with greater managerial power, a higher degree of equity dispersion, and a higher shareholding ratio of institutional investors. It shows that the absence of an ultimate controller is conducive to corporate innovation.