Innovation dynamics -what are the housing market uncertainty’s impacts

Dongyang Zhang

International Review of Economics & Finance, 2020, vol. 70, issue C, 413-422

Abstract: Uncertainty matters great for firms’ investment decisions and behaviors, and thus impacts economy growth. This paper uses the housing market uncertainty to measure economic uncertainty and explores how housing market uncertainty impacts on firms’ innovation activities. This paper shows the uncertainty has a positive impact on firms’ innovation performance, including R&D investment, innovation level and other innovation outcomes. Firms’ innovation performance is significantly driven by the uncertainty through the crowding-out effect of housing investment. Moreover, firms in higher competitive industries are more likely to invest in innovation due to the uncertainty shock. Furthermore, uncertainty in the housing market makes the cash flow and leverage used for innovation performance. Finally, innovation investment has a substitution effect on housing investment once there is a policy shock in limiting housing price in China.

Keywords: Housing market uncertainty; Innovation; Financial intermediations; Chinese firm-level data (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056020301957
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: https://EconPapers.repec.org/RePEc:eee:reveco:v:70:y:2020:i:c:p:413-422

DOI: 10.1016/j.iref.2020.08.015

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().