How does listing affect corporate innovation? Evidence from China’s National Equities Exchange and Quotations market

ABSTRACT

Technological innovation is an important determinant of economic growth, and the Chinese government is trying to create a favourable environment for corporations at both the regulatory and policy levels to improve the innovation level of firms. We use a difference-in-differences model to explore the impact of going public on innovation in small and medium-sized enterprises. A total of 5522 companies listed on the NEEQ from 2013 to 2017 are selected as samples in this study. The main conclusions are as follows: (1) Listing on NEEQ has a significant innovation incentive effect, and compared to unlisted enterprises, the incentive effect has the dynamic characteristics of continuous increase; (2) Further research finds that in the eastern region, where marketisation is higher, as well as the emerging industrial areas, the incentive effect of listing reached 0.4558 and 0.2691 million yuan, respectively, from the perspective of enterprise scale, and listing mainly stimulated the innovation of medium-sized enterprises; (3) Financing constraints and signal transmission partly mediate the relationship between listing and corporate innovation.

KEYWORDS:

• Listing
• corporate innovation
• financing constraints effect
• signaling transmit effect

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The sample of eastern regions includes 11 provinces (cities), such as Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan, while the sample of noneastern regions includes Sichuan, Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Guangxi, Inner Mongolia, Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan and Hubei, Hunan 20 provinces (city, autonomous region). Hong Kong, Macao and Taiwan data are not included in the full sample.

2 The criteria for the scale of enterprises refer to the Circular of the Ministry of Industry and Information Technology, the National Bureau of Statistics, the National Development and Reform Commission and the Ministry of Finance on the Printing and Issuing of the Standards for the Division of Small and Medium-sized Enterprises (No. 300, 2011).

Additional information

Funding

This research was funded by the fund project of the Major Programs of National Social Science Foundation of China [No. 22&ZD114], National Natural Science Foundation of China [No. 71974203; No. 72274142], and Innovation and Talent for Income Distribution and Public Finance [No. B20084].

Notes on contributors

Acheng Zhang

Acheng Zhang is a Ph.D. student in the School of International and Public Affairs at Shanghai Jiaotong University. His research interests focus on innovation policy, digital transformation and urban governance. He can be reached at [email protected].

Jingjing Zeng

Jingjing Zeng is a professor of the School of Public Administration at Zhongnan University of Economics and Law. Her research focuses on innovation management, innovation policy, and sustainable development. She can be reached at [email protected].

Chao Bi

Chao Bi is a professor of International Business School at Shaanxi Normal University Xi’an. His research focuses on industrial development, corporate innovation, and market financing. He can be reached at [email protected].