The Impact of Environmental Uncertainty on Corporate Innovation: Evidence from Chinese Listed Companies

Corporate innovation is an important topic in the academic community, but there are few studies on the impact of the micro operation environment on corporate innovation. Using the data of A-share listed companies in Shanghai and Shenzhen from 2009 to 2020, this paper examines the impact of environmental uncertainty on enterprise innovation from a micro perspective. The results show that there is an overall negative correlation between environmental uncertainty and corporate innovation. Companies facing a higher degree of environmental uncertainty are more cautious in their innovation investment. We also find that this negative correlation was more pronounced in companies with weaker risk-taking ability. Further research finds that financing constraints have a partial intermediary effect on the impact of environmental uncertainty on innovation, that is, environmental uncertainty can have a negative impact on innovation by increasing the financing constraints faced by corporations. Our research provides micro-level evidence for the impact of uncertainty on corporate innovation.