Do mandatory pension contributions hinder innovation? Empirical evidence
This paper empirically investigates the effect of mandatory pension contributions on firm innovation. We find that firms with mandatory contributions experience a decline in their innovation output. This effect is stronger for firms with financial constraints, more short-term institutional investors...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
KeAi Communications Co., Ltd.
2020-06-01
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| Series: | International Journal of Innovation Studies |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096248720300199 |
| Summary: | This paper empirically investigates the effect of mandatory pension contributions on firm innovation. We find that firms with mandatory contributions experience a decline in their innovation output. This effect is stronger for firms with financial constraints, more short-term institutional investors, higher levels of managerial short-termism. We also document that mandatory pension contributions result in a reduction in firm research and development expenditures and an increase in firm debt-to-asset ratio. Moreover, we report that firms with mandatory contributions increase their alliance activities to pursue innovation with external partners. |
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| ISSN: | 2096-2487 |