Peer effect of corporate R&D innovation from the perspective of uncertainty
Abstract
Based on external uncertainty environment and R&D innovation wave background, this paper explores the impact of information noise caused by economic policy uncertainty and the peer effect on corporate R&D innovation activities, using the multiple regression method and the quarterly data of listed Chinese companies from 2010 to 2020, the influencing mechanism and boundary condition of economic policy uncertainty on the peer effect of corporate R&D were analyzed. Results show that there is a significant peer effect at the industry level in the R&D innovation behavior of corporates, with said effect and the uncertainty of economic policies both significantly stimulate the R&D innovation activities of corporates. The imitation learning path of peer effect is obviously targeted, and corporates in the same industry prioritize corporates with comparative advantages in the industry. Economic policy uncertainty and peer effect also present a certain selection effect on corporate R&D innovation, possibly further enabling corporates with better operating conditions to gain greater market share and gradually eliminate corporates with low R&D innovation ability. The conclusions help decision makers use the peer effect to implement incentive policies and optimize management.
Keyword : R&D innovation, peer effect, external uncertainty, imitation path, selection effect, corporate governance
How to Cite
Liu, D., & Cai, Y. (2023). Peer effect of corporate R&D innovation from the perspective of uncertainty. Journal of Business Economics and Management, 24(2), 315–335. https://doi.org/10.3846/jbem.2023.19047
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Wan, L. Y., Liang, C. J., & Rao, J. (2016). Study on industry peer effect of M&A decision of listed companies. Nankai Management Review, 19(3), 40–50.
Wang, T., Li, X., Yu, C., Gu, X., & Zhang, K. H. (2021). Governance path of collective sanctions in enterprise innovation networks from the perspective of knowledge flow: A fsQCA approach. Transformations in Business & Economics, 20(1), 178–199.
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Zhang, F., Zhu, J., Liu, G., Wu, Y., & Zhang, L. (2022). R&D strategy of general-purpose technologies under the multi-agent participating mode based on dynamic games. Transformations in Business & Economics, 21(1), 53–82.
Atanassov, K., Atanassova, V., & Gluhchev, G. (2015). Intercriteria analysis: Ideas and problems. Notes on Intuitionistic Fuzzy Sets, 21(1), 81–88.
Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. The Quarterly Journal of Economics, 131(4), 1593–1636. https://doi.org/10.1163/2210-7975_HRD-9985-2015017
Caldara, D., Iacoviello, M., Molligo, P., Prestipino, A., & Raffo, A. (2020). The economic effects of trade policy uncertainty. Journal of Monetary Economics, 109, 38–59. https://doi.org/10.1016/j.jmoneco.2019.11.002
Cao, J., Liang, H., & Zhan, X. (2019). Peer effects of corporate social responsibility. Management Science, 65(12), 5487–5503. https://doi.org/10.1287/mnsc.2018.3100
Chen, H., & Cai, Y. P. (2021). The influence of economic uncertainty on the homogeneity effect of R&D investment of Chinese listed companies. Taxation and Economics, 234(1), 65–73.
Chen, S., & Ma, H. (2017). Peer effects in decision-making: Evidence from corporate investment. China Journal of Accounting Research, 10(2), 167–188. https://doi.org/10.1016/j.cjar.2016.11.002
Chen, M., Zhao, C., Liu, T., Ma, Y., & Zheng, X. (2022). Does the executive gender influence the enterprise innovation efficiency? Evidence from China’s listed companies. Transformations in Business & Economics, 21(3), 73–93.
Chen, X., Yi, N., Zhang, L., & Li, D. (2018). Does institutional pressure foster corporate green innovation? Evidence from China’s top 100 companies. Journal of Cleaner Production, 188, 304–311. https://doi.org/10.1016/j.jclepro.2018.03.257
Chen, Y. W., Chan, K., & Chang, Y. (2019). Peer effects on corporate cash holdings. International Review of Economics & Finance, 61, 213–227. https://doi.org/10.1016/j.iref.2019.02.008
Dou, Z., Xie, M., & Wang, X. (2022). Effects of multiple monetary policy tools on enterprises’ R&D investment: Differences among industry categories. Transformations in Business & Economics, 21(1), 83–100.
Feng, Y., Yu, Q., Nan, X., & Cai, Y. (2022). Can employee stock ownership plans reduce corporate financialization? Evidence from China. Economic Analysis and Policy, 73, 140–151. https://doi.org/10.1016/j.eap.2021.11.002
Gao, X., & Zhai, K. (2021). Spatial mechanisms of regional innovation mobility in China. Social Indicators Research, 156, 247–270. https://doi.org/10.1007/s11205-021-02638-2
Gong, X., Zhang, W., Xu, W., & Li, Z. (2022). Uncertainty index and stock volatility prediction: Evidence from international markets. Financial Innovation, 8(1), 1–44. https://doi.org/10.1186/s40854-022-00361-6
Gu, X. M., Chen, Y. M., & Pan, S. Y. (2018). Economic policy uncertainty and innovation – Based on the empirical analysis of Chinese listed companies. Economic Research, 53(2), 109–123.
Gulen, H., & Ion, M. (2016). Policy uncertainty and corporate investment. The Review of Financial Studies, 29(3), 523–564. https://doi.org/10.1093/rfs/hhv050
Guo, T. Y., & Sun, G. Y. (2021). Economic policy uncertainty, financing costs and business innovation. International Finance Research, 414(10), 78–87.
Handley, K., & Limão, N. (2017). Policy uncertainty, trade, and welfare: Theory and evidence for China and the United States. American Economic Review, 107(9), 2731–2783. https://doi.org/10.1257/aer.20141419
Hansen, G. S., & Hill, C. W. (1991). Are institutional investors myopic? A time‐series study of four technology‐driven industries. Strategic Management Journal, 12(1), 1–16. https://doi.org/10.1002/smj.4250120102
Hu, S., & Gong, D. (2019). Economic policy uncertainty, prudential regulation and bank lending. Finance Research Letters, 29, 373–378. https://doi.org/10.1016/j.frl.2018.09.004
Imbruno, M. (2019). Importing under trade policy uncertainty: Evidence from China. Journal of Comparative Economics, 47(4), 806–826. https://doi.org/10.1016/j.jce.2019.06.004
Leary, M. T., & Roberts, M. R. (2014). Do peer firms affect corporate financial policy?. The Journal of Finance, 69(1), 139–178. https://doi.org/10.1111/jofi.12094
Li, C., & Wang, X. (2022). Local peer effects of corporate social responsibility. Journal of Corporate Finance, 73, 102187. https://doi.org/10.1016/j.jcorpfin.2022.102187
Li, X. L., Chang, S. J., & Si, D. K. (2021). Monetary policy, economic uncertainty and firm investment efficiency. International Finance Research, 411(7), 86–96.
Lu, R., Wang, C., & Deng, M. M. (2017). Research on the “same group effect” of Chinese listed company capital structure. Economic Management, 39(1), 181–194.
Lu, J., Ren, L., Zhang, C., Rong, D., Ahmed, R. R., & Streimikis, J. (2020). Modified Carroll’s pyramid of corporate social responsibility to enhance organizational performance of SMEs industry. Journal of Cleaner Production, 271, 122456. https://doi.org/10.1016/j.jclepro.2020.122456
Mišević, P., & Tomašević, D. (2021). Knowledge management as a business strategy of a learning organisation. Tehnički Glasnik, 15(2), 191–198. https://doi.org/10.31803/tg-20210113152513
Naveed, A., & Shabbir, G. (2022). Effect of formal and informal institutional indicators on innovation activities: An empirical analysis for a global sample. Social Indicators Research, 164(2), 665–691. https://doi.org/10.1007/s11205-022-02975-w
Pan, F., & Yang, B. (2019). Financial development and the geographies of startup cities: Evidence from China. Small Business Economics, 52, 743–758. https://doi.org/10.1007/s11187-017-9983-2
Peng, Z., Lian, Y., & Forson, J. A. (2020). Peer effects in R&D investment policy: Evidence from China. International Journal of Finance & Economics, 26(3), 4516–4533. https://doi.org/10.1002/ijfe.2028
Saman, C. (2022). The effect of human capital, R&D and patents on economic growth: Evidence from heterogeneous cross-country data. Transformations in Business & Economics, 21(3), 306–318.
Shaikh, I. (2020). Does policy uncertainty affect equity, commodity, interest rates, and currency markets? Evidence from CBOE’s volatility index. Journal of Business Economics and Management, 21(5), 1350–1374. https://doi.org/10.3846/jbem.2020.13164
Sorli-Pena, M., & Parra-Gomez, A. (2020). China in context: Current situation, strategies and uncertainties. Dyna, 95(3), 233–236. https://doi.org/10.6036/9479
Tan, X. F., & Zhang, W. J. (2017). The channel analysis of the influence of economic policy uncertainty on enterprise investment. World Economy, 12(1), 3–26.
Vrontis, D., & Christofi, M. (2021). R&D internationalization and innovation: A systematic review, integrative framework and future research directions. Journal of Business Research, 128, 812–823. https://doi.org/10.1016/j.jbusres.2019.03.031
Wan, L. Y., Liang, C. J., & Rao, J. (2016). Study on industry peer effect of M&A decision of listed companies. Nankai Management Review, 19(3), 40–50.
Wang, T., Li, X., Yu, C., Gu, X., & Zhang, K. H. (2021). Governance path of collective sanctions in enterprise innovation networks from the perspective of knowledge flow: A fsQCA approach. Transformations in Business & Economics, 20(1), 178–199.
Xiong, Z., Wang, P., & Wang, L. (2023). Firms’ re-innovation after failure and institutional environment: an evolutionary game theoretical approach. Economic Research-Ekonomska Istraživanja, 36(1), 885–905. https://doi.org/10.1080/1331677X.2022.2080743
Xue, S., Zhang, L., Chen, H., & Yin, J. (2022). Does environmental underperformance duration affect firms’ green innovation? Evidence from China. Business Ethics, the Environment & Responsibility, 31(3), 662–681. https://doi.org/10.1111/beer.12434
Zhang, F., Zhu, J., Liu, G., Wu, Y., & Zhang, L. (2022). R&D strategy of general-purpose technologies under the multi-agent participating mode based on dynamic games. Transformations in Business & Economics, 21(1), 53–82.