Abstract: Under the conditions of economic policy uncertainty, how to strengthen development tenacity and improve innovation level is an important issue that enterprises are faced with. By employing the common factor model, this paper estimates the tenacity of listed companies in China and investigates the influence of economic policy uncertainty(EPU)on the innovation activities of enterprises with different tenacitiesand their mechanisms. The findings show that the differences of the level of enterprise tenacity would generate threshold effects on the impact of the economic policy uncertainty on enterprise innovation activities. When EPU rises, enterprises with lower-tenacitywill reduce their innovation activities, while enterprises with higher-tenacitywill increase their innovation activities. The threshold effect of enterprise tenacity exists in different market regions and enterprises of different property rights nature. There are significant differences in the response to EPUof enterprises with different tenacityin terms of innovative income expectations, financing constraints, and management's risk preference, which is also the reason for the occurrence of the threshold effect in enterprise tenacity. In addition, enterprise tenacity can be used as an alternative to the internal governance of the enterprises to some extent, which send positive signals to investors, thereby helping enterprises obtain more financing. The innovative activities under the EPU conditions will help to improve the operation performance of enterprises, but the negative impact on the bankruptcy of enterprises is not obvious.

Key words: economic policy uncertainty, enterprise innovation, enterprise tenacity, threshold effect