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Adverse effects of financial innovation on technological innovation: The case of commodity futures

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  • Zhou, Tong

Abstract

Commodity futures, a type of financial innovation that has been widely traded in the real sector since the 19th century, have long been deemed tools that improve risk management and enhance operational performance. In this paper, I unveil a dark side of commodity futures: they impede corporate technology innovation performance. Specifically, utilizing the staggered nature of commodity futures listings across industries and a comprehensive sample of Chinese manufacturers, I find that listings of commodity futures reduce innovation outputs, decrease R&D inputs, and weaken firms' exploratory nature of innovation. Further tests suggest that such dark side plays a role because commodity futures stimulate financial speculation, intensify competition via promoting product market information transparency, and induce corporate myopia.

Suggested Citation

  • Zhou, Tong, 2026. "Adverse effects of financial innovation on technological innovation: The case of commodity futures," Research Policy, Elsevier, vol. 55(7).
    • Handle: RePEc:eee:respol:v:55:y:2026:i:7:s0048733326000855
    DOI: 10.1016/j.respol.2026.105494
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    Keywords

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    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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