Impact of Economic Policy Uncertainty on Agribusiness Technology Innovation: Evidence from 231 Listed Firms in China

Abstract

The role of enterprise technological innovation in driving high-quality economic development has become increasingly prominent in a dynamic environment of uncertainty. This study examines the impact of economic policy uncertainty on enterprise technological innovation and its mechanism of action using panel data of agricultural listed firms in China 2007–2021. We obtain the following results. (1) Economic policy uncertainty significantly promotes technological innovation in agricultural firms, and this finding holds under various robustness checks, and works mainly through two paths: tightening financial flexibility and highlighting managerial capabilities. (2) From the heterogeneity results, the incentive effect of economic policy uncertainty on technological innovation in agricultural firms is more pronounced in state-owned agricultural firms, basic agricultural firms, and high adjustment cost agricultural firms. (3) Government subsidies strengthen the role of economic policy uncertainty in promoting technological innovation in agricultural firms. The results of this study provide data support for agricultural firms technology innovation decisions and have important implications for the guidance of national economic policy formulation.