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Uncertainty and corporate R&D investment: Evidence from Chinese listed firms

Author

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  • Wang, Yizhong
  • Wei, Yueling
  • Song, Frank M.

Abstract

Using data from Chinese listed firms, this paper studies the effects of policy and market uncertainties on corporate R&D investment. The empirical findings indicate that both policy and market uncertainties can negatively affect corporate R&D investment. Policy uncertainty poses a significant impact on R&D investment for politically connected firms, but has no impact on firms without political connections. Market uncertainty only has a clear impact on non-politically connected firms. The negative influence of uncertainty is more obvious for firms receiving fewer government subsidies.

Suggested Citation

  • Wang, Yizhong & Wei, Yueling & Song, Frank M., 2017. "Uncertainty and corporate R&D investment: Evidence from Chinese listed firms," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 176-200.
  • Handle: RePEc:eee:reveco:v:47:y:2017:i:c:p:176-200
    DOI: 10.1016/j.iref.2016.10.004
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    More about this item

    Keywords

    Government policy; R&D investment; Policy uncertainty; Market uncertainty;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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