The study is titled Pension Fund Equity Investment and Firm Productivity. The paper looks at pension funds from an investment perspective. The authors examine whether equity investment (acquiring a stake in a firm) by pension funds in a firm is related to that firm’s productivity. They find that unlisted firms with equity investment from at least one pension fund are, on average, 3.4–4.7% more productive than similar firms without such investment. This effect is stronger when the pension fund’s ownership stake is larger, held for a longer period, and closer in the ownership chain. Entry by a pension fund is also followed by an increase in the number of other investors. For listed firms, the study does not find a significant relationship between pension fund investment and firm productivity.

Relevance for policy

The results suggest that pension funds can play an important role in supporting the real economy, especially through the productivity of unlisted firms. This is relevant for policymakers, including in the European Union, where expanding occupational pension schemes is seen as a way to strengthen investment, deepen capital markets and support firm growth.