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The impact of US monetary policy on Chinese enterprises’ R&D investment

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  • Zhang, Dongyang
  • Guo, Yumei
  • Wang, Zhaorui
  • Chen, Yanbin

Abstract

With economic globalization, the behavior of a domestic enterprise is significantly affected by foreign economic policy. This paper investigates the relationship between the US monetary policy and the R&D investment of Chinese enterprises from 2015 to 2018. Ultimately, we find that the Federal Reserve's interest rate hike has a positive and significant impact on R&D investment by Chinese enterprises, particularly for the small-scaled and low-innovative enterprises. Furthermore, other innovation proxies, including the intensification of new products and patents, are also driven by Federal Reserve's interest rate hike.

Suggested Citation

  • Zhang, Dongyang & Guo, Yumei & Wang, Zhaorui & Chen, Yanbin, 2020. "The impact of US monetary policy on Chinese enterprises’ R&D investment," Finance Research Letters, Elsevier, vol. 35(C).
    • Handle: RePEc:eee:finlet:v:35:y:2020:i:c:s1544612319307445
    DOI: 10.1016/j.frl.2019.09.016
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