Impact of investor sentiment on firm innovation: Evidence from textual analysis
The paper examines whether and how investor sentiment affects corporate innovation. The study finds a statistically significant relationship between investor sentiment and firm innovation. Our findings demonstrate that investor sentiment has a positive causal impact on firm innovation, as revealed t...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2023-09-01
|
| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845023000790 |
| _version_ | 1797686827252973568 |
|---|---|
| author | Zihao Lin |
| author_facet | Zihao Lin |
| author_sort | Zihao Lin |
| collection | DOAJ |
| description | The paper examines whether and how investor sentiment affects corporate innovation. The study finds a statistically significant relationship between investor sentiment and firm innovation. Our findings demonstrate that investor sentiment has a positive causal impact on firm innovation, as revealed through the use of the instrumental variable method and propensity score matching approach, as well as the use of changes in investor sentiment as independent variables. The results still hold after using alternative measures of investor sentiment. Our subsample analysis indicates that investor sentiment boosts innovation, regardless of R&D ratios. The estimated results after considering changes in economic conditions remain consistent with the baseline estimates. The mechanism analysis suggests that investor sentiment alleviates financing constraints and enhances R&D investment, thereby positively impacting firm innovation. |
| first_indexed | 2024-03-12T01:11:18Z |
| format | Article |
| id | doaj.art-fe9f6b8bcd954e7e8ab2a30a3273169b |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-03-12T01:11:18Z |
| publishDate | 2023-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-fe9f6b8bcd954e7e8ab2a30a3273169b2023-09-14T04:53:40ZengElsevierBorsa Istanbul Review2214-84502023-09-0123511411151Impact of investor sentiment on firm innovation: Evidence from textual analysisZihao Lin0Center for Studies of Hong Kong, Macao and Pearl River Delta, Institute of Guangdong, Hong Kong and Macao Development Studies, Sun Yat-sen University, Guangzhou, ChinaThe paper examines whether and how investor sentiment affects corporate innovation. The study finds a statistically significant relationship between investor sentiment and firm innovation. Our findings demonstrate that investor sentiment has a positive causal impact on firm innovation, as revealed through the use of the instrumental variable method and propensity score matching approach, as well as the use of changes in investor sentiment as independent variables. The results still hold after using alternative measures of investor sentiment. Our subsample analysis indicates that investor sentiment boosts innovation, regardless of R&D ratios. The estimated results after considering changes in economic conditions remain consistent with the baseline estimates. The mechanism analysis suggests that investor sentiment alleviates financing constraints and enhances R&D investment, thereby positively impacting firm innovation.http://www.sciencedirect.com/science/article/pii/S2214845023000790Corporate innovationFinancing constraintsInvestor sentimentTextual analysis |
| spellingShingle | Zihao Lin Impact of investor sentiment on firm innovation: Evidence from textual analysis Borsa Istanbul Review Corporate innovation Financing constraints Investor sentiment Textual analysis |
| title | Impact of investor sentiment on firm innovation: Evidence from textual analysis |
| title_full | Impact of investor sentiment on firm innovation: Evidence from textual analysis |
| title_fullStr | Impact of investor sentiment on firm innovation: Evidence from textual analysis |
| title_full_unstemmed | Impact of investor sentiment on firm innovation: Evidence from textual analysis |
| title_short | Impact of investor sentiment on firm innovation: Evidence from textual analysis |
| title_sort | impact of investor sentiment on firm innovation evidence from textual analysis |
| topic | Corporate innovation Financing constraints Investor sentiment Textual analysis |
| url | http://www.sciencedirect.com/science/article/pii/S2214845023000790 |
| work_keys_str_mv | AT zihaolin impactofinvestorsentimentonfirminnovationevidencefromtextualanalysis |