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Political uncertainty and innovation of export enterprises: international evidence for developing countries

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Abstract

Political uncertainty is a crucial disadvantage to the internationalization of enterprises in developing countries. Using data from a survey of World Bank in 106 developing countries from 2006 to 2020, this study empirically investigates the innovative behavior of export enterprises in response to political uncertainty. The empirical results illustrate that export enterprises significantly improve the probability of participating in product innovation activities and R&D innovation activities under higher political uncertainty. Export enterprises substitute for fixed asset investment by engaging in innovative activities that can mitigate the decline in exports in an uncertain political environment. Both financing constraints and domestic production competition significantly reduce the positive effect of political uncertainty on the innovation of export enterprises.

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Acknowledgements

This research was funded by the Youth Project of National Social Science Foundation of China (Grant No. 21CJL028).

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Authors and Affiliations

  1. School of Business, Jiangxi Normal University, Nanchang, 330022, China

    Fengxiu Zhou

  2. School of Economics and Management, Nanchang University, Nanchang, 330031, China

    Chien-Chiang Lee

  3. Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon

    Chien-Chiang Lee

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  1. Fengxiu Zhou
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Correspondence to Chien-Chiang Lee.

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Appendix

Appendix

Table 13 displays descriptive statistics for the main variables in this study, including dependent variables, core explanatory variables, control variables and mechanism variables.

Table 13 Statistical descriptions of important variables
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The benchmark model's variable correlation coefficients are displayed in Table 14 for Table 3's benchmark model.

Table 14 Coefficients of correlation between the important factors
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Zhou, F., Lee, CC. Political uncertainty and innovation of export enterprises: international evidence for developing countries. Econ Change Restruct 56, 4371–4400 (2023). https://doi.org/10.1007/s10644-023-09554-0

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