How Does COVID-19 Affect Corporate Research and Development? Evidence from China

Qinqin Zhuang, Weijie Luo and Yupeng Li

Emerging Markets Finance and Trade, 2023, vol. 59, issue 9, 3011-3023

Abstract: This paper examines how COVID-19 affects firm research and development (R&D) using the data of Chinese-listed companies from 2018 to 2020. Our results show that COVID-19 significantly inhibits firm R&D input. However, such significant evidence mainly exists on firms classified as private enterprises, with smaller size, or belonging to high-technology industries. Moreover, we find evidence that the epidemic reduces firm revenue but, in the meantime, increases the financing constraint, leading to less R&D investment. The conclusion of this study provides a theoretical basis and practical reference for enterprises to make better decisions on innovative activities.

Date: 2023
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DOI: 10.1080/1540496X.2023.2199115

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