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Political Uncertainty

In: Public-Private Partnership and Policy Uncertainty

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  • Weijie Luo

    (Beijing International Studies University)

Abstract

This paper explores cycles in innovative outcomes corresponding with the timing of political turnover. Utilizing the data on local government officials and innovative activities at the firm level in China, a turnover in local political leaders is found to be negatively associated with innovation. We examine several potential explanations and find evidence supporting that political turnover reduces the incentives of firms to innovate until the uncertainty is resolved. This paper also indicates that local political turnover significantly holds back research and development investment, government subsidy, and the decision of expansion, leading to less innovative outcomes.

Suggested Citation

  • Weijie Luo, 2025. "Political Uncertainty," Springer Books, in: Public-Private Partnership and Policy Uncertainty, chapter 0, pages 93-110, Springer.
    • Handle: RePEc:spr:sprchp:978-981-96-8074-0_6
    DOI: 10.1007/978-981-96-8074-0_6
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