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Article

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

1
School of Law, Southwestern University of Finance and Economics, Chengdu 611130, China
2
School of Business Administration, Southwestern University of Finance and Economics, Chengdu 611130, China
*
Author to whom correspondence should be addressed.
Academic Editor: Pompeo Della Posta
Sustainability 2021, 13(5), 2746; https://doi.org/10.3390/su13052746
Received: 8 January 2021 / Revised: 23 February 2021 / Accepted: 28 February 2021 / Published: 3 March 2021
(This article belongs to the Special Issue Investment, Growth and Sustainability)
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. View Full-Text
Keywords: uncertainty; world uncertainty index; R& D investment; patent application uncertainty; world uncertainty index; R& D investment; patent application
MDPI and ACS Style

Lin, Y.; Dong, D.; Wang, J. The Negative Impact of Uncertainty on R&D Investment: International Evidence. Sustainability 2021, 13, 2746. https://doi.org/10.3390/su13052746

AMA Style

Lin Y, Dong D, Wang J. The Negative Impact of Uncertainty on R&D Investment: International Evidence. Sustainability. 2021; 13(5):2746. https://doi.org/10.3390/su13052746

Chicago/Turabian Style

Lin, Yuchen, Daxin Dong, and Jiaxin Wang. 2021. "The Negative Impact of Uncertainty on R&D Investment: International Evidence" Sustainability 13, no. 5: 2746. https://doi.org/10.3390/su13052746

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