Geopolitical risk and corporate innovation: Evidence from risk preference and risk-taking capacity perspectives

Xueting Wang and Man Wang

Economics Letters, 2024, vol. 241, issue C

Abstract: This paper investigates how geopolitical risk affects corporate innovation from the perspectives of corporate risk preference and risk-taking capacity. We document a significant positive impact of geopolitical risk on corporate innovation and find that corporate risk preference and risk-taking capacity strengthen the positive impact of geopolitical risk. Further analysis shows that market competition and corporate financial asset holdings are potential channels through which geopolitical risk increases corporate innovation.

Keywords: Geopolitical risk; Corporate innovation; Risk preference; Risk-taking ability (search for similar items in EconPapers)
JEL-codes: G31 O31 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524003045

DOI: 10.1016/j.econlet.2024.111820

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