Political uncertainty and innovation of export enterprises: international evidence for developing countries

Fengxiu Zhou and Chien-Chiang Lee ()
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Fengxiu Zhou: Jiangxi Normal University

Economic Change and Restructuring, 2023, vol. 56, issue 6, No 24, 4400 pages

Abstract: Abstract Political uncertainty is a crucial disadvantage to the internationalization of enterprises in developing countries. Using data from a survey of World Bank in 106 developing countries from 2006 to 2020, this study empirically investigates the innovative behavior of export enterprises in response to political uncertainty. The empirical results illustrate that export enterprises significantly improve the probability of participating in product innovation activities and R&D innovation activities under higher political uncertainty. Export enterprises substitute for fixed asset investment by engaging in innovative activities that can mitigate the decline in exports in an uncertain political environment. Both financing constraints and domestic production competition significantly reduce the positive effect of political uncertainty on the innovation of export enterprises.

Keywords: R&D innovation; Political uncertainty; Product innovation; Export enterprises; Developing countries (search for similar items in EconPapers)
JEL-codes: F23 O32 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10644-023-09554-0

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