Economic Policy Uncertainty and Corporate Innovation Behavior

This paper explores the impact of economic policy uncertainty on corporate innovation behavior. By integrating uncertainty theory, innovation theory, and real options theory, it constructs a comprehensive theoretical framework to explain how economic policy uncertainty affects corporate innovation decisions. Specifically, the paper posits that economic policy uncertainty influences corporate risk assessment, investment decisions, and option realization, ultimately having a profound impact on their innovation activities. This paper analyzes in detail the strategies that companies might adopt when facing economic policy uncertainty, including delaying investments, phased innovation investments, and diversified innovation investments. These strategies aim to minimize the risks brought about by policy uncertainty while maintaining the company's competitiveness and innovative capabilities in the market. Additionally, this paper proposes a series of hypotheses to further verify the specific impact of increased economic policy uncertainty on corporate innovation behavior. These hypotheses include: when economic policy uncertainty increases, companies will delay innovation investments; and in highly uncertain policy environments, companies tend to adopt diversified innovation investment strategies to spread risk. Finally, this paper provides valuable references from both corporate and governmental perspectives, helping corporate managers and policymakers formulate more effective innovation and management strategies in the context of economic policy uncertainty.