Firm-level political risk and corporate innovation: evidence from US listed firms

IF 1.8 Q2 BUSINESS, FINANCE

International Journal of Managerial Finance Pub Date : 2022-05-05 DOI:10.1108/ijmf-11-2021-0554

H. A. Ahmed, M. Muttakin, Arifur Khan

{"title":"Firm-level political risk and corporate innovation: evidence from US listed firms","authors":"H. A. Ahmed, M. Muttakin, Arifur Khan","doi":"10.1108/ijmf-11-2021-0554","DOIUrl":null,"url":null,"abstract":"PurposeThe study examines the association between firm-level political risk and corporate innovation and also this study explores how financial constraint and growth level of a firm influence this association.Design/methodology/approach A sample of 14,140 firm-year observations of the US firms from 2003 to 2020 is used. Unlike prior studies, this study uses a firm-level measure of political risk recently developed by Hassan et al. (2019) and measure innovation by patent and patent citation data and a text-based measure. A regression technique is used for empirical testing.FindingsThis study finds that firm-level political risk is negatively associated with innovation and also document that firm-level political risk has a negative impact on innovation for financially constrained and high growth firms. The overall results are robust after addressing the issue of potential endogeneity using entropy balancing and two-stage least squares regression techniques. This study also documents qualitatively consistent results after using alternative measures of innovation as well as firm-level political uncertainty.Research limitations/implicationsThe findings of this study could help the managers to make better investment decision and improve economic efficiency through understanding the effect of firm-level political risk on innovation activities.Originality/valueThe study concentrates on firm-level political risk and innovation and presents new insights that political risk at the microlevel is an important determinant for investment in innovative activities.","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":" ","pages":""},"PeriodicalIF":1.8000,"publicationDate":"2022-05-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"4","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Managerial Finance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ijmf-11-2021-0554","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 4

Abstract

PurposeThe study examines the association between firm-level political risk and corporate innovation and also this study explores how financial constraint and growth level of a firm influence this association.Design/methodology/approach A sample of 14,140 firm-year observations of the US firms from 2003 to 2020 is used. Unlike prior studies, this study uses a firm-level measure of political risk recently developed by Hassan et al. (2019) and measure innovation by patent and patent citation data and a text-based measure. A regression technique is used for empirical testing.FindingsThis study finds that firm-level political risk is negatively associated with innovation and also document that firm-level political risk has a negative impact on innovation for financially constrained and high growth firms. The overall results are robust after addressing the issue of potential endogeneity using entropy balancing and two-stage least squares regression techniques. This study also documents qualitatively consistent results after using alternative measures of innovation as well as firm-level political uncertainty.Research limitations/implicationsThe findings of this study could help the managers to make better investment decision and improve economic efficiency through understanding the effect of firm-level political risk on innovation activities.Originality/valueThe study concentrates on firm-level political risk and innovation and presents new insights that political risk at the microlevel is an important determinant for investment in innovative activities.

查看原文本刊更多论文

企业层面的政治风险与企业创新:来自美国上市公司的证据

目的本研究考察了企业层面的政治风险与企业创新之间的联系，并探讨了企业的财务约束和增长水平如何影响这种联系。设计/方法/方法使用了2003年至2020年美国公司14140个公司年度的观察样本。与之前的研究不同，本研究使用了Hassan等人最近开发的一种企业层面的政治风险衡量方法。（2019），并通过专利和专利引用数据以及基于文本的衡量标准来衡量创新。使用回归技术进行实证检验。研究结果本研究发现，企业层面的政治风险与创新呈负相关，也证明了企业层面的政策风险对财务受限和高增长企业的创新具有负面影响。在使用熵平衡和两阶段最小二乘回归技术解决潜在内生性问题后，总体结果是稳健的。这项研究还记录了在使用创新的替代措施以及公司层面的政治不确定性后，定性一致的结果。研究局限性/含义本研究的发现可以通过了解企业层面的政治风险对创新活动的影响，帮助管理者做出更好的投资决策，提高经济效率。独创性/价值这项研究专注于企业层面的政治风险和创新，并提出了新的见解，即微观层面的政治危机是创新活动投资的重要决定因素。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

International Journal of Managerial Finance BUSINESS, FINANCE-

CiteScore

4.10

自引率

0.00%

发文量

期刊介绍： Treasury and Financial Risk Management ■Redefining, measuring and identifying new methods to manage risk for financing decisions ■The role, costs and benefits of insurance and hedging financing decisions ■The role of rating agencies in managerial decisions Investment and Financing Decision Making ■The uses and applications of forecasting to examine financing decisions measurement and comparisons of various financing options ■The public versus private financing decision ■The decision of where to be publicly traded - including comparisons of market structures and exchanges ■Short term versus long term portfolio management - choice of securities (debt vs equity, convertible vs non-convertible)