Peer effect of enterprise innovation: Empirical evidence from China.

Innovation investment is crucial to enterprise development and economic growth. As peer enterprises face similar market environment and development prospects, they pay attention to the innovation activities of peer enterprises in the industry because of economic rationality or the idea of seeking advantages and avoiding disadvantages. This paper aims to investigate the interaction and channel of enterprise innovation behavior of peer effect based on the data of Chinese share-listed enterprises from 2010 to 2021. The results show that peer effect exists in the innovation behavior of enterprises. We also provide evidence that managerial ability is the mechanism of the peer effect of enterprise innovation. In addition, we find that small-scale enterprises are more likely to be affected by the innovation behavior of peer enterprises compared with large enterprises. More importantly, we reveal that economic policy uncertainty significantly negatively regulates the peer effect of enterprise innovation. JEL classification: G30, G31, O31.