Economic Policy Uncertainty, Heterogeneity of Executives and Enterprise Innovation

Abstract

This study analyzes how economic policy uncertainty affects corporate innovation, and the moderating effects of executive heterogeneity. A threephase dynamic investment and financing model is first built to analyze the mechanism. Empirical analysis confirms that the increase in the degree of economic policy uncertainty promotes enterprise innovation. Further results show that this promotion effect is more significant in enterprises with male executives, low educational level, no financial experience and political background. Moreover, the positive impact is only found in enterprises with moderate executive ability, and the overconfidence of senior executives plays a positive regulating role in it.