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Political Turnover and Firm Innovation in China: The Moderating Role of Innovation and Entrepreneurship Environment

Author

Listed:
  • Xing Shi

    (School of Economics, Hefei University of Technology, Hefei, China)

  • Ya Zhang

    (School of Economics, Hefei University of Technology, Hefei, China)

  • Yanrui Wu

    (Business School, The University of Western Australia)

  • Huaqing Wu

    (School of Economics, Hefei University of Technology, Hefei, China)

Abstract

The empirical work in this paper is based on an analysis of the data of China's listed companies, the innovation and entrepreneurship index, and local official turnover data at the city level. It shows that policy uncertainty caused by local political turnover in local governments significantly reduces firm innovation. However, improvement in local innovation and entrepreneurship environment can lessen this negative impact. This moderating effect is especially relevant among non-high-tech or financially constrained firms. The robustness of these findings is checked through a series of alternative analyses such as dealing with endogeneity, optional measures of the dependent variable and subsamples.

Suggested Citation

  • Xing Shi & Ya Zhang & Yanrui Wu & Huaqing Wu, 2023. "Political Turnover and Firm Innovation in China: The Moderating Role of Innovation and Entrepreneurship Environment," Economics Discussion / Working Papers 23-08, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:23-08
    Note: MD5 = 0084b0b6be21d5c6c8d415d807b47215
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Political turnover; Policy uncertainty; Innovation and entrepreneurship environment; Firm innovation; China;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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