Political Uncertainty And Enterprise Innovation

Since the reform and opening up nearly 40 years,China's economy has already taken off qualitatively.As the world's second largest economy,how to maintain and improve economic development is the first and foremost problem.As we can see,in the process of rapid development,China mainly adopted the extensive and labor-intensive economic development model in the early stage.With the improvement of people's living standard and their requirements for a better life,China's economic development has begun to experience a quantitative--qualitative--intellectual transition.December 4,2012,the politburo conference stressed that the economic work should further strengthen innovation drive,accelerate the transformation and upgrading of industry,and independent innovation of structural adjustment of leading role into full play.Since then,the central leadership has repeatedly stressed the need to comprehensively deepen reform,reduce the cost of entrepreneurship and innovation,and increase the vitality of economic development.Therefore,an innovation-friendly market environment can stimulate enterprises' enthusiasm for innovation to the greatest extent.Through literature review,We find that when policy uncertainty in the market increases,market transparency,information asymmetry and market stability will be reduced.Therefore,the innovation vitality of enterprises will be damaged and their enthusiasm for research and development will be inhibited.This paper attempts to study the influence of the policy uncertainty brought by the event on the innovation investment of high-tech enterprises from the perspective of the change of party secretary of the provincial party committee in China.Specifically,this paper mainly studies two major issues: first,whether the policy uncertainty brought by the change of party secretary of the provincial party committee will restrain the innovation investment of enterprises;Second: as the degree of policy uncertainty deepens,whether this inhibition will have a stronger trend.In order to answer the above questions,this paper takes the data of high-tech enterprises from 2008 to 2017 as the sample for empirical research,and we find that :(1)policy uncertainty is significantly negatively correlated with enterprise innovation.In addition,we divided the samples into the state-owned enterprise group and the private enterprise group,the working capital high group and the working capital low group.The empirical results show that policy uncertainty has a more significant inhibitory effect on innovation investment in the private enterprise group and the sample group with low working capital.(2)No matter the expected or unexpected change of officials in the political cycle,it will restrain the innovation investment of enterprises,but there is no significant difference between the two.(3)No matter whether the new provincial party secretary comes from local or foreign places,it will lead to the decrease of enterprise innovation investment,but the impact of different sources of officials on enterprise innovation investment is not significantly different.This paper enriches relevant literature on policy uncertainty and enterprise innovation.Firstly,this paper not only discusses the impact of policy uncertainty on enterprise innovation,but also deepens theoretical research in both horizontal and vertical aspects.Horizontally,this paper further subdivides the samples to explore the response of different types of samples to the impact of the same policy uncertainty.Vertically,this paper explores whether the increase of the degree of policy uncertainty will bring greater "shock" to enterprise innovation.Secondly,this paper further identifies causal problems,and constructs DID general model by taking the change of party secretary of the provincial party committee as the policy shocks,which can effectively control the deviation of omitted variables,effectively identify the real causal relationship between variables and greatly reduce endogenous problems.