The Impact of Government Bailout Policies on Corporate Innovation: Evidence from Listed Companies

In recent years, government bailout policies have become an important tool for stabilizing market participants, and their impact on corporate innovation has become a focal point for both academic research and policy makers. This paper uses data from listed companies between 2014 and 2019 to empirically analyze, via a difference-in-differences (DID) model, the effect of a significant local government bailout policy on corporate innovation. The findings reveal that the bailout policy significantly promotes innovative output, as evidenced by increases in the number of invention patents and utility model patent applications. Robustness checks-including alternative measures of variables, changes in the regression model, adjustments to the sample period, and the use of propensity score matching (PSM)-confirm the validity of this conclusion. Mechanism analysis indicates that the policy works by alleviating firms' financing constraints and reducing agency costs. Furthermore, heterogeneity tests show that the policy effect is more pronounced in companies located in eastern regions and those with strong profitability. This study provides a new perspective on the interaction between government intervention and corporate innovation and offers important insights for optimizing bailout policy design.