Capital Market Opening-up and High-Quality Innovation of Enterprises

Abstract

At present, China’s innovation field is facing the structural dilemma of quantity priority and insufficient quality. In the critical window period when the economy turns to high-quality development, the improvement of enterprise innovation level has become an important issue. Based on the quasi-natural experimental scenario of capital market opening, this paper constructs a multi-period difference-in-differences model to test the effect of capital market opening on the quality of enterprise innovation. Both theoretical deduction and empirical test show that capital market opening helps to improve the quality of enterprise innovation, and this effect is more significant in state-owned enterprises and enterprises with overseas business income. From the perspective of mechanism, on the one hand, the opening of capital market promotes the improvement of innovation quality by improving corporate governance and alleviating financing bottlenecks ; on the other hand, due to the increase of stock liquidity, the quality of innovation is suppressed. Overall, the positive effect is dominant. This paper not only expands the theoretical analysis of the relationship between capital market opening and enterprise innovation, but also provides a useful reference for policy practice.