The Impact of Geopolitical Risks on Digital Innovation Among Small and Medium-Sized Enterprises in Beijing

Authors

  • Qingai Zhang Beijing City University Author
  • Han Zhang Beijing City University Author
  • Yunqian Cao Beijing City University Author
  • Yuxin Yang Beijing City University Author

DOI:

https://doi.org/10.71204/txxsg368

Keywords:

Geopolitical Risk, Small and Medium-Sized Enterprises, Digital Innovation

Abstract

Against the backdrop of an increasingly complex geopolitical environment, geopolitical risks have become a key external variable influencing digital innovation among small and medium-sized enterprises (SMEs). Focusing on SMEs in Beijing, this study employs a questionnaire survey to explore the internal mechanisms through which geopolitical risks affect corporate digital innovation. The questionnaire survey of 102 SMEs in Beijing reveals that geopolitical risks exert a dual impact on corporate digital innovation-both inhibiting and driving it. Although enterprises have implemented self-help measures, their risk-resilience varies significantly. Enterprises have an urgent need for subsidy and financing policies, yet gaps remain in the current policy offerings. Based onfindings, these this paper develops a self-assessment tool for corporate geopolitical risks and offers practical insights from three dimensions: corporate risk assessment, government public services, and social science research and practice.At the same time, the paper objectively analyzes research limitations-such as sample distribution and analytical methods-to provide a reference for the digital development of Beijing’s SMEs and for subsequent related empirical studies.

References

Aiyar, S., Malacrino, D., & Presbitero, A. F. (2024). Investing in friends: The role of geopolitical alignment in FDI flows. European Journal of Political Economy, 83, 102508. DOI: https://doi.org/10.1016/j.ejpoleco.2024.102508

Caldara, D., & Iacoviello, M. (2022). Measuring geopolitical risk. American Economic Review, 112(4), 1194–1225. DOI: https://doi.org/10.1257/aer.20191823

Caldara, D., Iacoviello, M., Molligo, P., Prestipino, A., & Raffo, A. (2020). The economic effects of trade policy uncertainty. Journal of Monetary Economics, 109, 38–59. DOI: https://doi.org/10.1016/j.jmoneco.2019.11.002

Chowdhury, M. S. R., Aram, M., & Javadi, S. (2025). Geopolitical risk and corporate capital structure. Journal of Corporate Finance, 7(93), 102796. DOI: https://doi.org/10.1016/j.jcorpfin.2025.102796

Deist, M. K., McDowell, W. C., & Bouncken, R. B. (2023). Digital units and digital innovation: Balancing fluidity and stability for the creation, conversion, and dissemination of sticky knowledge. Journal of Business Research, 161, 113827. DOI: https://doi.org/10.1016/j.jbusres.2023.113827

Feng, C. N., Han, L. Y., Vigne, S., & Xu, Y. (2023). Geopolitical risk and the dynamics of international capital flows. Journal of International Financial Markets, Institutions & Money, 82, 101693. DOI: https://doi.org/10.1016/j.intfin.2022.101693

Hasan, S. B., Alam, M. S., Paramati, S. R., & Islam, M. S. (2022). Does firm-level political risk affect cash holdings? Review of Quantitative Finance and Accounting, 59, 311–337. DOI: https://doi.org/10.1007/s11156-022-01049-9

He, Y., & Liang, X. C. (2025). Research on the mechanism of digital change enabling high-quality development of small and medium-sized enterprises. Journal of Shanghai University of Finance and Economics, 27(3), 56–71.

Lee, C. C., Zhang, J., & Fang, L. (2023). How does geopolitical risk affect corporate innovation? Evidence from China’s listed companies. Emerging Markets Finance and Trade, 59(7), 2217–2233. DOI: https://doi.org/10.1080/1540496X.2023.2170698

Liu, Y., Dong, J. Y., & Wei, J. (2020). Digital innovation management: Theoretical framework and future research agenda. Management World, (7), 198–217, 219.

Zhang, X. H. (2020). Obstacles, driving factors, and path dependence of digital transformation in small and medium-sized enterprises: Evidence from a survey of 377 SMEs in the tertiary sector. China Business and Market, 34(12), 72–82.

Downloads

Published

2026-11-06

How to Cite

The Impact of Geopolitical Risks on Digital Innovation Among Small and Medium-Sized Enterprises in Beijing. (2026). Financial Strategy and Management Reviews, 2(2), 1-13. https://doi.org/10.71204/txxsg368

Similar Articles

You may also start an advanced similarity search for this article.