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PurposeAlthough investigating the factors influencing technological diversification is essential to understanding research and development (R&D) strategies, studies from the perspective of corporate ownership structure are limited. This study examines the effect of heterogeneous institutional investors on technological diversification strategies.Design/methodology/approachThe sample consists of 33,124 firm-year observations of USA manufacturing firms from 1981 to 2008. Data were extracted from US Patent Data, Thomson Reuters' 13f and the Compustat database. A panel regression analysis was used to test the hypothesis. Moreover, the two-stage least squares (2SLS) approach using instrumental variables (IVs) and generalized method of moments (GMM) were also applied to address the endogeneity issue.FindingsThe empirical findings indicate that short-term (long-term) institutional investors positively (negatively) affect technological diversification. That is, short-term institutional ownership hampers R&D diversification, suggesting that firms are forced to make myopic investments to meet short-term goals instead of diversifying corporate R&D projects. Meanwhile, long-term institutional ownership enhances technological diversification to achieve long-term value.Research limitations/implicationsBy differentiating between institutional investment horizons, the authors produce empirical evidence that institutional investors with short-term and long-term perspectives have different views on technological diversification. This study is based on data between 1981 and 2008, due primarily to patent data availability and data on institutional investors. However, this limitation does not diminish the importance of the empirical findings, as the study's focus is on discovering antecedent evidence of corporate technological diversification rather than addressing recent trends in firm decisions.Practical implicationsIn finding that long-term institutional investors are likely to encourage technological diversification at firms, the paper carries an important practical implication that can help inform decision-making by policymakers and investors.Originality/valueThis research contributes to a more comprehensive understanding of institutional investors' role in technological diversification strategies. Additionally, by challenging the assumption that all institutional owners share the same perspective, this study is the first to confirm the existence of heterogeneous effects of institutional investors on technological diversification strategies.

PurposeThis study examines whether the behavioral attributes, such as overconfidence, of chief executive officers (CEO) and chief operating officers (COO) affect firm's inventory leanness. If they do, how are they interacting with each other? Moreover, incorporating market competition into the analysis, this study explores how the competition moderates the relationship between managerial overconfidence and inventory leanness.Design/methodology/approachUsing a large panel data of US manufacturing firms between 1998 and 2015, this study measures top managers' overconfident characteristics using stock option information. Then, a panel regression analysis is adopted to test the effects of managerial overconfidence on inventory leanness. Moreover, a moderation model is applied to investigate the interaction effects of market competition.FindingsFirms with overconfident COOs (CEOs), other circumstances being equal, increase (decrease) the inventory leanness as the market becomes more competitive.Practical implicationsThe study suggests that firms should understand top managers' behavioral characteristics to manage inventory efficiently. Collectively, CEOs (COOs) tend to increase (decrease) inventory levels due to their overconfidence as the market gets competitive. Firms should establish a systematic process to be reviewed by diverse stakeholders to deal with managerial overconfidence.Originality/valueThis study is an exploratory study that examines whether and how top management's behavioral attribute relates to a firm's operations performance. It underlines that CEO and COO's overconfident characteristics determine the inventory leanness when market competition is considered. Numerous studies on firm-level strategies emphasized the top managers' overconfidence as a key factor. However, behavioral characteristics at the top management level have rarely been studied in operations management fields. Based on the results, scholars could compare and understand the effects of CEO and COO overconfidence to provide insights into inventory management.