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Political turnover and firm innovation in China: The moderating role of innovation and entrepreneurship environment

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  • Shi, Xing
  • Zhang, Ya
  • Wu, Yanrui
  • Wu, Huaqing

Abstract

The empirical work in this paper is based on an analysis of the data of China's listed companies, the innovation and entrepreneurship index, and local official turnover data at the city level. It shows that policy uncertainty caused by local political turnover in local governments significantly reduces firm innovation. However, improvement in local innovation and entrepreneurship environment can lessen this negative impact. This moderating effect is especially relevant among non-high-tech or financially constrained firms. The robustness of these findings is checked through a series of alternative analyses such as dealing with endogeneity, optional measures of the dependent variable and subsamples.

Suggested Citation

  • Shi, Xing & Zhang, Ya & Wu, Yanrui & Wu, Huaqing, 2023. "Political turnover and firm innovation in China: The moderating role of innovation and entrepreneurship environment," Journal of Asian Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:asieco:v:88:y:2023:i:c:s1049007823000714
    DOI: 10.1016/j.asieco.2023.101651
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    More about this item

    Keywords

    Political turnover; Policy uncertainty; Innovation and entrepreneurship environment; Firm innovation; China;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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