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Innovation in the storm: How typhoons are reshaping the corporate R&D landscape

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  • Lei, Xue
  • Xu, Xueguo

Abstract

The increasing frequency and intensity of typhoons pose significant challenges to corporate innovation, a crucial driver of both economic growth and societal resilience. However, the mechanisms through which typhoons affect corporate innovation and their broader societal implications remain underexplored. This study addresses this critical gap by examining Chinese A-share listed companies from 2010 to 2022. Using wind field models to construct typhoon destructive power indices and employing difference-in-differences and instrumental variable approaches, we reveal that typhoons significantly reduce patent applications and R&D expenditure intensity, especially in coastal regions. Our heterogeneity analysis further shows that state-owned enterprises demonstrate greater resilience due to institutional support, firms with higher R&D intensity exhibit particular vulnerability to typhoon disruptions. We identify three primary inhibition channels: (1) economic losses and market uncertainties exacerbate financial constraints, limiting innovation investment in socially beneficial technologies; (2) population migration and safety concerns lead to human capital loss, weakening innovative capacity and knowledge networks within communities; and (3) infrastructure damage disrupts R&D activities, particularly affecting the development of disaster-resilient technologies. These findings contribute to understanding how extreme weather events impact society's technological adaptive capacity and provide crucial empirical evidence for policy formulation. By emphasizing the importance of building resilient innovation ecosystems, our research offers timely insights for enhancing societal preparedness and technological equity in the context of increasing environmental challenges.

Suggested Citation

  • Lei, Xue & Xu, Xueguo, 2025. "Innovation in the storm: How typhoons are reshaping the corporate R&D landscape," Technology in Society, Elsevier, vol. 81(C).
  • Handle: RePEc:eee:teinso:v:81:y:2025:i:c:s0160791x25000181
    DOI: 10.1016/j.techsoc.2025.102828
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    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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