The Bright Side of Political Uncertainty: The Case of R&D

• 成果类型: Article
• 署名作者: Atanassov, Julian; Julio, Brandon; Leng, Tiecheng
• 署名单位: University of Nebraska System; University of Nebraska Lincoln; University of Oregon; Harbin Institute of Technology
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhae023
• 发表日期: 2024
• 页码: 2937
• 关键词: Policy uncertainty; INNOVATION; irreversibility; location; mergers

摘要

We use close gubernatorial elections as a quasi-natural experiment to document a positive effect of political uncertainty on firm-level R&D. This finding is in contrast to the existing literature documenting a negative impact of political uncertainty on capital investment. We examine potential mechanisms and find that our results are consistent with the growth option view of R&D investment. The effect is stronger for politically sensitive and high-tech industries.The results are robust to different proxies for political uncertainty shocks. As predicted by models of investment under uncertainty, the real effects of political uncertainty critically depend on the type of the investment. JEL G18, G38, O31, O32