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Impact of fiscal education expenditure on innovation of local listed enterprises: Evidence from China

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  • Tan, Qijia
  • Li, Cuilan
  • Qin, Zhaohui
  • Yu, Siming
  • Pan, Yuchen
  • Andrianarimanana, Mihasina Harinaivo

Abstract

Developing countries are generally confronted with the issue of insufficient investment in education. However, with the rapid development of the economy of China and the continuous increase of the innovation capability of enterprises, fiscal investment in education is expected to be among the main factor contributing to the innovation of enterprises. Based on the panel data of 31 provinces and listed companies in China from 2005 to 2021, this study used a fixed effect model to analyze the influence and mechanism of fiscal education expenditure on enterprise innovation. The results confirmed that fiscal expenditure on education promotes enterprise innovation. Further analysis showed that there is regional heterogeneity in the impact of fiscal education expenditure on enterprise innovation. For instance, the magnitude of the effect of fiscal education expenditure on enterprise innovation was found higher in the Eastern region compared to the Western region. These findings deepen our understanding of the impact of fiscal education expenditure on enterprise innovation. Furthermore, it provides references to developing countries on the importance of fiscal education expenditure in optimizing the innovation of enterprises.

Suggested Citation

  • Tan, Qijia & Li, Cuilan & Qin, Zhaohui & Yu, Siming & Pan, Yuchen & Andrianarimanana, Mihasina Harinaivo, 2023. "Impact of fiscal education expenditure on innovation of local listed enterprises: Evidence from China," Finance Research Letters, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005640
    DOI: 10.1016/j.frl.2023.104192
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    1. Meixia Wang & Yunxia Wang, 2024. "Does Factor Market Distortion Inhibit Enterprise Innovation? Empirical Evidence from Chinese Industrial Enterprises," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 12830-12853, September.

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