Government Spending and Corporate Innovation

• 成果类型: Article
• 署名作者: Kong, Lei
• 署名单位: University of Alabama System; University of Alabama Tuscaloosa
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2018.3252
• 发表日期: 2020
• 页码: 1584-1604
• 关键词: corporate innovation; Government spending; resource diversion; government dependence

摘要

I study the impact of government spending on corporate innovation. Using changes in U.S. Senate committee chairmanships as a source of exogenous variation in state-level federal government expenditures, I find that firms headquartered in states with increases in government spending significantly reduce their innovation output, as measured by their number of patents and the citations to these patents. These reductions are mostly concentrated in labor-intensive industries, in firms headquartered in states with lower unemployment rates, and in government-dependent industries. My findings suggest that resource diversion induced by increased government spending is a channel through which government spending may affect corporate innovation.