Impact of fiscal education expenditure on innovation of local listed enterprises: Evidence from China

Qijia Tan, Cuilan Li, Zhaohui Qin, Siming Yu, Yuchen Pan and Mihasina Harinaivo Andrianarimanana

Finance Research Letters, 2023, vol. 57, issue C

Abstract: Developing countries are generally confronted with the issue of insufficient investment in education. However, with the rapid development of the economy of China and the continuous increase of the innovation capability of enterprises, fiscal investment in education is expected to be among the main factor contributing to the innovation of enterprises. Based on the panel data of 31 provinces and listed companies in China from 2005 to 2021, this study used a fixed effect model to analyze the influence and mechanism of fiscal education expenditure on enterprise innovation. The results confirmed that fiscal expenditure on education promotes enterprise innovation. Further analysis showed that there is regional heterogeneity in the impact of fiscal education expenditure on enterprise innovation. For instance, the magnitude of the effect of fiscal education expenditure on enterprise innovation was found higher in the Eastern region compared to the Western region. These findings deepen our understanding of the impact of fiscal education expenditure on enterprise innovation. Furthermore, it provides references to developing countries on the importance of fiscal education expenditure in optimizing the innovation of enterprises.

Keywords: Fiscal education expenditure; Enterprise innovation; Human capital accumulation (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005640

DOI: 10.1016/j.frl.2023.104192

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