Abstract

This paper uses the multi-period difference-in-differences (DID) method to empirically test the effects of Tech-Fin on the innovation output of companies based on a quasi-natural experiment to examine China's Tech-Fin pilot city reform. We find that Tech-Fin significantly increased the innovation output of high-tech companies in the pilot cities and in cities with weak intellectual property protection. In addition, Tech-Fin had no significant effects on the innovation output of pseudo-high-tech companies and technology-intensive high-tech companies. We further find that Tech-Fin motivated high-tech companies to increase their innovation output through innovation correction and risk-smoothing effects.