Affiliation:
1. Center for Economic Development Research, Wuhan University, Wuhan 430072, China
2. Economics and Management School, Wuhan University, Wuhan 430072, China
Abstract
Innovation is the main driving force of the sustainable development of enterprises. Economic policy uncertainty has increased dramatically in recent years due to events such as COVID-19, which will alter the business environment of enterprises and ultimately affect their innovation behavior. How economic policy uncertainty will affect corporate innovation has become a crucial topic, but empirical studies have not reached consistent conclusions, and few have noted the heterogeneity of different firms’ perceptions of uncertainty. This study used a textual analysis approach to create firm-level economic policy uncertainty indicators from the texts of annual reports of Chinese A-share listed firms. Based on the effectiveness of our measure of economic policy uncertainty, we further examined its impact on firm innovation. We find that our uncertainty measure has negative effects on enterprise innovation activity, and this negative impact is more significant among non-state-owned enterprises, and firms with higher financial constraints and lower government subsidies. We extend the measurement of economic policy uncertainty from the micro level and provide some suggestions for policymakers at the macro level. In the period of increasing uncertainty in the external environment, the government should try to maintain the stability and transparency of economic policies, and provide more targeted policy support to enterprises, such as by broadening their financing channels and providing innovation subsidies.
Subject
Management, Monitoring, Policy and Law,Renewable Energy, Sustainability and the Environment,Geography, Planning and Development,Building and Construction
Reference94 articles.
1. Policy uncertainty and Corporate Investment;Gulen;Rev. Financ. Stud.,2016
2. Endogenous innovation in the theory of Growth;Grossman;J. Econ. Perspect.,1994
3. Uncertainty shocks and unemployment dynamics in U.S. recessions;Caggiano;J. Monet. Econ.,2014
4. Uncertainty shocks in a model of effective demand;Basu;Econometrica,2017
5. Uncertainty and unemployment;Schaal;Econometrica,2017
Cited by
3 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献