Do mandatory pension contributions hinder innovation? Empirical evidence

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...

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Main Authors: Hao Shen, Haizhi Wang, Zehui Wang, Desheng Yin
Format: Article
Language:English
Published: KeAi Communications Co., Ltd. 2020-06-01
Series:International Journal of Innovation Studies
Subjects:
Pension
Mandatory contribution
Innovation
Online Access:http://www.sciencedirect.com/science/article/pii/S2096248720300199
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spelling doaj-b952df178aef42cb8debab46dedd09f32021-04-02T12:44:30ZengKeAi Communications Co., Ltd.International Journal of Innovation Studies2096-24872020-06-01422739Do mandatory pension contributions hinder innovation? Empirical evidenceHao Shen0Haizhi Wang1Zehui Wang2Desheng Yin3Stuart School of Business, Illinois Institute of Technology, 565 W Adams Street, Chicago, IL, 60661, USAStuart School of Business, Illinois Institute of Technology, 565 W Adams Street, Chicago, IL, 60661, USASoftware College of Northeastern University, 500 Wisdom St, Hunnan New District, Shenyang, Liaoning, 110169, ChinaSchool of Economics, East China Normal University, 3663 N. Zhongshan Road, Shanghai, 200062, China; Corresponding author.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.http://www.sciencedirect.com/science/article/pii/S2096248720300199PensionMandatory contributionInnovation
collection DOAJ
language English
format Article
sources DOAJ
author Hao Shen
Haizhi Wang
Zehui Wang
Desheng Yin
spellingShingle Hao Shen
Haizhi Wang
Zehui Wang
Desheng Yin
Do mandatory pension contributions hinder innovation? Empirical evidence
International Journal of Innovation Studies
Pension
Mandatory contribution
Innovation
author_facet Hao Shen
Haizhi Wang
Zehui Wang
Desheng Yin
author_sort Hao Shen
title Do mandatory pension contributions hinder innovation? Empirical evidence
title_short Do mandatory pension contributions hinder innovation? Empirical evidence
title_full Do mandatory pension contributions hinder innovation? Empirical evidence
title_fullStr Do mandatory pension contributions hinder innovation? Empirical evidence
title_full_unstemmed Do mandatory pension contributions hinder innovation? Empirical evidence
title_sort do mandatory pension contributions hinder innovation? empirical evidence
publisher KeAi Communications Co., Ltd.
series International Journal of Innovation Studies
issn 2096-2487
publishDate 2020-06-01
description 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.
topic Pension
Mandatory contribution
Innovation
url http://www.sciencedirect.com/science/article/pii/S2096248720300199
work_keys_str_mv AT haoshen domandatorypensioncontributionshinderinnovationempiricalevidence
AT haizhiwang domandatorypensioncontributionshinderinnovationempiricalevidence
AT zehuiwang domandatorypensioncontributionshinderinnovationempiricalevidence
AT deshengyin domandatorypensioncontributionshinderinnovationempiricalevidence
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