Role of corporate innovation and uncertainty in determining corporate investment of the firm: does financial constraint, executive risk preference and firm risk-taking ability play any role
- Title
- Role of corporate innovation and uncertainty in determining corporate investment of the firm: does financial constraint, executive risk preference and firm risk-taking ability play any role
- Creator
- Rana A.; Debata B.
- Description
- Purpose: This paper aims to investigate the relationship between corporate innovation and the firms corporate investment. Further, the authors begin with the assertion that the relationship between corporate innovation and corporate investment is impacted by significantly a) uncertain periods, b) financial constraint, c) executives risk preference and d) firm risk-taking ability. Design/methodology/approach: This study has considered non-financial listed companies (774 firms) for the period spanning from 20102022. The authors use a fixed effect regression model within a panel data framework to examine the relationship between corporate innovation and investment. For robustness, the authors use system generalised methods of moments to investigate the relationship between corporate investment and corporate innovation across all the samples. Findings: This study finds a positive relationship between corporate innovation and corporate investment, which means when the firm tries to make some innovation, it will increase its expenditure on fixed assets. However, the positive relationship between corporate innovation and corporate investment reduces with uncertainty. Additionally, financial constraint plays a significant role in determining this relationship. Executives and firms with high risk-taking ability tend to be more inclined to make investments. Originality/value: The study is unique because it determines the impact of corporate innovation on corporate investment. The current literature is focused on corporate innovation and uncertainties. However, no light has been shed on the relationship between corporate innovation and investment. At the same time, the authors have introduced three more variables which play a significant role in determining the corporate innovation-investment relationship. , Emerald Publishing Limited.
- Source
- Journal of Indian Business Research
- Date
- 2024-01-01
- Publisher
- Emerald Publishing
- Subject
- Corporate innovation; Corporate investment; Economic policy uncertainty; Executive risk preference; Financial constraint; Firm risk-taking ability
- Coverage
- Rana A., Department of Commerce, Christ University, Delhi-NCR, India and Department of Economics and Finance, Birla Institute of Technology and Science Pilani, Pilani, India; Debata B., Department of Economics and Finance, Birla Institute of Technology and Science Pilani, Pilani, India
- Rights
- Restricted Access
- Relation
- ISSN: 17554195
- Format
- Online
- Language
- English
- Type
- Article
Collection
Citation
Rana A.; Debata B., “Role of corporate innovation and uncertainty in determining corporate investment of the firm: does financial constraint, executive risk preference and firm risk-taking ability play any role,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 23, 2025, https://archives.christuniversity.in/items/show/13373.