This study investigates the "stars effect" of recruiting overseas scholars as deans and its impact on academic output in China from 2001-2019. We find that appointing a returnee dean increases a department's English publications by 40% annually. This positive effect applies to both top-tier and non-top-tier journals, without crowding out Chinese publications. The magnitude of the effect correlates with the dean's international connections and the ranks of the destination and source institutions. Returnee deans enhance output through knowledge spillovers, expanded networks, and increased overseas personnel, but not additional research grants. Our findings demonstrate the positive role and extensive influence of power-granted talent initiatives in developing regions.

Common institutional ownership can enhance knowledge spillovers by increasing portfolio firms’ awareness about each other’s innovation. By investigating listed electronic hardware firms in China for 2000-2016, we find that when common ownership by mutual funds is higher between a firm pair, it is more likely that these two firms cite each other’s patents. To confirm causality, we show that even the exogenous increase in firms’ common ownership following their inclusion into the stock index still positively influences the citing likelihood. We also find that such citations are taken place in a timely manner. Additionally, this positive effect is robust when the effects of overlapping board members and common ownership by other types of institutional investors are controlled for. This effect is more pronounced among nonneighboring firms, when non-neighboring firms are close to their common owners, when common owners hold shares longer, and when firms’ executives have lower incentive to communicate (i.e., SOEs). Last, we find that common ownership by mutual funds also enhances knowledge spillovers through third-party patents. This paper deepens the understanding of knowledge spillovers among firms in developing countries.