Geopolitical risk and corporate innovation: Evidence from China

Shaoqing Jia, Liuyong Yang and Fangzhao Zhou

Journal of Multinational Financial Management, 2022, vol. 66, issue C

Abstract: This study examines the impact of geopolitical risk (GPR) on corporate innovation in China. Using the GPR Index constructed by Caldara and Iacoviello (2018), we find that, first, GPR has a significantly positive effect on corporate innovation. Second, the effect is more pronounced for state-owned firms and firms with more government subsidies, overseas businesses, and product market competition. Third, GPR motivates firms to innovate mainly through the degree of threat. Finally, heterogeneous exposure to GPR is positively correlated with corporate innovation. This study enriches the empirical research on the impact of GPR on corporate decision-making.

Keywords: Geopolitical risk; Corporate innovation; R&D; Patent; Risk exposure (search for similar items in EconPapers)
JEL-codes: D80 G32 O31 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:66:y:2022:i:c:s1042444x22000433

DOI: 10.1016/j.mulfin.2022.100772

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