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Storm clouds over innovation: Typhoon shocks and corporate R&D activities

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  • Lei, Xue
  • Xu, Xueguo

Abstract

This study investigates the economic impact of typhoon disasters on corporate innovation activities, a critical driver of economic growth and resilience. Utilizing a comprehensive dataset of Chinese public companies from 2010 to 2022 and employing a wind field model to construct a city-level typhoon destruction index, we apply difference-in-differences and instrumental variable methods to analyze the effects on corporate innovation. Our findings reveal that typhoon disasters significantly reduce both patent filings and R&D investment intensity, particularly in coastal areas and technology-intensive industries. The adverse effects are transmitted through financial constraints, human capital loss, and infrastructure damage. This research contributes to understanding the microeconomic implications of extreme weather events on innovation-driven economic growth, offering insights for disaster resilience policies in vulnerable regions.

Suggested Citation

  • Lei, Xue & Xu, Xueguo, 2024. "Storm clouds over innovation: Typhoon shocks and corporate R&D activities," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004981
    DOI: 10.1016/j.econlet.2024.112014
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    References listed on IDEAS

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    1. Kuhla, Kilian & Willner, Sven N & Otto, Christian & Levermann, Anders, 2023. "Resilience of international trade to typhoon-related supply disruptions," Journal of Economic Dynamics and Control, Elsevier, vol. 151(C).
    2. Markus Reichstein & Felix Riede & Dorothea Frank, 2021. "More floods, fires and cyclones — plan for domino effects on sustainability goals," Nature, Nature, vol. 592(7854), pages 347-349, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Xueguo Xu & Hetong Yuan & Xue Lei, 2024. "From Technological Integration to Sustainable Innovation: How Diversified Mergers and Acquisitions Portfolios Catalyze Breakthrough Technologies," Sustainability, MDPI, vol. 16(24), pages 1-16, December.

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    More about this item

    Keywords

    Typhoon disasters; Corporate innovation; Natural Disaster Economics;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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