Abstract

http://ssrn.com/abstract=2368587
 


 



What Affects Innovation More: Policy or Policy Uncertainty?


Utpal Bhattacharya


Hong Kong University of Science & Technology - HKUST School of Business and Management

Po-Hsuan Hsu


University of Hong Kong

Xuan Tian


Indiana University - Kelley School of Business - Department of Finance

Yan Xu


HKU, Faculty of Business and Economics

February 24, 2014


Abstract:     
We examine whether it is policy or policy uncertainty that affects technological innovation, using a large sample of 43 countries that have had various policy changes because of national elections. We find that innovation, captured by growth in patent counts, citations, and originality, is not affected by which policy (left, right, or center) is in place. Innovation, however, drops significantly during times of policy uncertainty measured by national elections. Taken together, our results suggest that businesses adapt to different policies, but face a problem when they do not know which policy to adapt to. Our paper suggests that political compromise is a plus for innovation.

Number of Pages in PDF File: 49

Keywords: Innovation, Policy uncertainty, Policy, Patents, Political party

JEL Classification: D22, D72, D80, E66, F68, G38, H11, O31, O38, O57

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Date posted: December 18, 2013 ; Last revised: May 12, 2014

Suggested Citation

Bhattacharya , Utpal and Hsu, Po-Hsuan and Tian, Xuan and Xu, Yan, What Affects Innovation More: Policy or Policy Uncertainty? (February 24, 2014). Available at SSRN: http://ssrn.com/abstract=2368587 or http://dx.doi.org/10.2139/ssrn.2368587

Contact Information

Utpal Bhattacharya (Contact Author)
Hong Kong University of Science & Technology - HKUST School of Business and Management ( email )
Clear Water Bay
Kowloon
Hong Kong
Po-Hsuan Hsu
University of Hong Kong ( email )
Pokfulam Road
Hong Kong
China
Xuan Tian
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. Tenth Street
Bloomington, IN 47405
United States
812-8553420 (Phone)
824-8555875 (Fax)
HOME PAGE: http://kelley.iu.edu/tianx

Yan Xu
HKU, Faculty of Business and Economics ( email )
Pok Fu Lam Road
Hong Kong
Hong Kong
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