Economics at your fingertips  

Firm-level perception of uncertainty and innovation activity: Textual evidence from China's A-share market

Zhen Yu, Yao Xiao and Jinpo Li

Pacific-Basin Finance Journal, 2021, vol. 68, issue C

Abstract: This study evaluates the firm-level perception of uncertainty using a textual analysis approach. Based on the annual reports of China's listed firms, we construct the perception of uncertainty from the management team and examine its impact on innovation activity. We find that managers' interpretations of the environment will affect their innovation incentives, and uncertainty leads to a decrease in the number of patent filings. The results are robust when we adopt an instrumental variable approach and apply alternative measures of variables. This study quantifies firms' perception of uncertainty and provides micro evidence for the correlation between uncertainty and innovation activity.

Keywords: Perception of uncertainty; Innovation; Textual analysis (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.pacfin.2021.101555

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-12-18
Handle: RePEc:eee:pacfin:v:68:y:2021:i:c:s0927538x21000627