Corporate entrepreneurship is important for organizational survival, profitability, growth, and renewal. Data from 127 Fortune 500 companies show that executive stock ownership and long-term institutional ownership are positively associated with such entrepreneurship. Conversely, short-term institutional ownership is negatively associated with it, as is a high ratio of outside directors on a company's board. Outside directors' stock ownership somewhat mitigates the latter negative association. Outsiders, including stock owners, might lead companies away from internal product development, the traditional route to corporate entrepreneurship. Finally, an industry's technological opportunities moderate the associations observed between corporate governance and ownership variables and corporate entrepreneurship.
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Shaker A. Zahra (1996) studied this question.
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