Uncertainty and R&amp;D investment: Does product market competition matter?

Khan, Muhammad Arif; Qin, Xuezhi; Jebran, Khalil; Ullah, Irfan

doi:10.1016/j.ribaf.2019.101167

Cited by 40 publications

(25 citation statements)

References 60 publications

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“…The study results provided strong support to some previous studies which reported a negative impact of uncertainty on R&D investment, including Arif Khan et al [5], Cho and Lee [11], Czarnitzki and Toole [8], Goel and Ram [12], Ivus and Wajda [1], Jung and Kwak [15], Nan and Han [17], Wang et al [4], and Xu [20]. The results did not support several studies that reported a positive effect of uncertainty, such as Atanassov et al [3], Gu et al [13], Han et al [14], Jiang and Liu [6], Meng and Shi [16], Ross et al [9], Stein and Stone [18], Tajaddini and Gholipour [7], and Vo and Le [19].…”

Section: Conclusion and Discussionsupporting

confidence: 89%

“…Several kinds of indicators are available to measure the degree of uncertainty. Generally speaking, three types of indicators have been used in prior studies: political election or turnover (e.g., [3,4]), the economic policy uncertainty (EPU) index (e.g., [5][6][7], and observed market or firm-specific volatility (e.g., [1,8,9]). At the country level, the EPU index developed by Baker et al [10] and other researchers is the most frequently used indicator.…”

Section: Literature Review and Hypothesis Development 21 Literaturementioning

confidence: 99%

“…As shown in Ahir et al [2], globally, this index spiked near great events such as the 9/11 attack, Euro debt crisis, and Brexit. This index has a high correlation coefficient (>0.7) with the economic policy uncertainty index, which has been used in many previous studies (e.g., [5,14,20]). This property ensures that we can compare our study results with those reported in the literature while having the advantage that we can examine many more countries.…”

Section: Core Explanatory Variable Of Interestmentioning

confidence: 99%

“…Thus, now we move to another way of mitigating the endogeneity problem. (c) Some previous studies, such as Arif Khan et al [5], Atanassov et al [3], Cho and Lee [11], and Ross et al [9], used the GMM (Generalized Method of Moments) to tackle the endogeneity. The advantage of GMM is that it relies on the "internal" instruments generated from the data and, thus, does not require to seek for additional "external" instruments.…”

Section: Robustness Checkmentioning

confidence: 99%

See 3 more Smart Citations

The Negative Impact of Uncertainty on R&D Investment: International Evidence

2021

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Previous studies have not provided consistent conclusions regarding the impact of uncertainty on research and development (R&D) investment. While most of the previous literature has focused only on one or a small group of countries, this study examines the effect of uncertainty on R&D on the basis of a sample covering 109 countries from 1996 to 2018. The country-level uncertainty is measured using the “World Uncertainty Index”, which has recently been developed by Ahir et al. (2018). By estimating a panel data fixed-effects regression model, it is found that uncertainty has a significantly negative impact on R&D investment at the country-level aggregate scale. We also find that uncertainty depresses the number of R&D personnel and patent applications, although the effect on R&D personnel is not statistically significant. These findings imply that high uncertainty poses a considerable threat to global innovation and technological progress. Heterogeneity analyses across different country groups demonstrate that, although the impact of uncertainty on R&D is not statistically significant in some country groups, its effect is always negative and no positive effect is observed.

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Section: Conclusion and Discussionsupporting

confidence: 89%

Section: Literature Review and Hypothesis Development 21 Literaturementioning

confidence: 99%

Section: Core Explanatory Variable Of Interestmentioning

confidence: 99%

Section: Robustness Checkmentioning

confidence: 99%

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The Negative Impact of Uncertainty on R&D Investment: International Evidence

2021

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“…Dangl (1999) showed that market uncertainty leads to an increase in R&D investment. Khan, Qin, Jebran, and Ullah (2020) and Wang et al (2017) empirically studied how policy and market uncertainties affect corporate R&D investment. Their findings claimed that both policy and market uncertainties have negative impacts on corporate R&D investment.…”

mentioning

confidence: 99%

The effects of uncertainties over R&D policy or market demand on R&D levels

Mai

Lin

2021

Manage Decis Econ

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This paper investigates how product market uncertainty and government research and development (R&D) subsidy uncertainty affect R&D levels in a duopoly with R&D rivalry and technological spillovers from an advanced large firm. Within this framework, one small firm and one large firm compete on R&D and output. We find that if firms' R&D efforts are strategic complements, then the firms' R&D outputs would decrease due to increased uncertainty over R&D policy but would increase due to increased uncertainty over market demand. Thus, we conclude that different types of uncertainties exert different impacts on R&D investment decisions.

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Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market

Borozan,

Pirgaip

2024

Bus Strat Env

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This paper examines the impact of climate policy uncertainty (CPU) on carbon dioxide (CO2) emissions of 1007 listed firms over 2003–2021. As the urgency to combat climate change and implement effective policies may create uncertainty, it focuses on the Unites States, a significant emitter with a complex policy landscape. Using the two‐step system generalized method of moments estimation, the analysis reveals a negative CPU–CO2 emissions relationship, indicating that increased CPU incentivizes firms to adopt sustainable practices, leading to emissions reductions. Capital expenditures have similar effects on emissions, accompanied by increased corporate sustainability engagement. However, no significant relationship is found between research and development (R&D) expenditure and CO2 emissions, nor does CPU significantly moderate the R&D–CO2 emissions nexus. Firms with substantial fixed assets exhibit higher CO2 emissions, while heavy emitters demonstrate limited CPU responsiveness. These findings provide valuable insights for policymakers encouraging corporate participation in emissions reduction efforts.

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Uncertainty and R&D investment: Does product market competition matter?

Cited by 40 publications

References 60 publications

The Negative Impact of Uncertainty on R&D Investment: International Evidence

The Negative Impact of Uncertainty on R&D Investment: International Evidence

The effects of uncertainties over R&D policy or market demand on R&D levels

Climate policy uncertainty and firm‐level carbon dioxide emissions: Assessing the impact in the U.S. market

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