Environmental Uncertainty, Financial Investment and Corporate Innovation

Jiamin Lei () and Rong Men ()
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Jiamin Lei: Beijing Jiao Tong University, School of Economics and Management
Rong Men: Beijing Jiao Tong University, School of Economics and Management

A chapter in Proceedings of the 2024 2nd International Conference on Digital Economy and Management Science (CDEMS 2024), 2024, pp 222-228 from Springer

Abstract: Abstract Innovation is the core driving force for national development. However, with the increasingly prominent issue of corporate financialization in recent years, especially after the US financial crisis, the corporate innovation system is more open than universities and research institutions and more sensitive to environmental uncertainty. Both corporate financial investment and corporate innovation are characterized by high investment and high risk, and the role of environmental uncertainty between them cannot be ignored. This article studies non-financial enterprises listed on China’s A-share market and finds that corporate financial investment has a negative impact on innovation input and output, and environmental uncertainty will exacerbate this impact. The effect of capital reserve and short-term financial gain masks the impact of financial investment on technological innovation input, while the resource competition effect mediates the relationship between financial investment and technological innovation output. This study is of great significance for understanding the impact of financial investment on corporate innovation under environmental uncertainty, and provides a reference for the government and enterprises to address issues of financialization and the economy shifting from the real to the virtual.

Keywords: Environmental uncertainty; financial investment; corporate innovation; de-realization and deflation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-488-4_24

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DOI: 10.2991/978-94-6463-488-4_24

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