Political instability, access to private debt, and innovation investment in China

Douglas Cumming (First Author), Oliver Meng Rui (Participant Author), Yiping Wu (Participant Author)

Research output: Contribution to journalJournal

50 Citations (Web of Science)

Abstract

We provide evidence from China that access to loans positively affects the probability that a firm will invest in innovation. However, the positive effect of private debt on innovation investment is significantly moderated by political instability. The cost of political instability on innovation is less severe when the entrepreneur has political connections to party leaders. Furthermore, we show that political connections increase the probability that an entrepreneur has access to direct governmental support for innovation investment. These findings are more. pronounced for technology intensive industries.
Original languageEnglish
Pages (from-to)68-81
JournalEmerging Markets Review
Volume29
DOIs
Publication statusPublished - 2016

Corresponding author email

wu.yiping@shufe.edu.cn

Project name

国家自然基金:企业创新的财政激励机制扭曲:形成机制、经济后果与改革策略;;其他:Social Sciences and Humanities Research Council of Canada

Project sponsor

其他

Project No.

企业创新的财政激励机制扭曲:形成机制、经济后果与改革策略:71673174;;Social Sciences and Humanities Research Council of Canada:435-2012-1725

Keywords

  • CONNECTED FIRMS
  • China
  • ECONOMETRIC EVALUATION ESTIMATOR
  • Innovation
  • MARKET
  • PERFORMANCE
  • PROPERTY-RIGHTS
  • Political instability
  • Private debt
  • TRANSITION
  • TURNOVER

Indexed by

  • ABDC-A
  • Scopus
  • SSCI

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