Theoretical modeling reveals financial transparency boosts innovation in enterprises, suggesting improved capital access amid financing constraints.
This study explores how fiscal transparency alleviates corporate financing constraints and thereby impacts innovation investment. Through theoretical modeling and empirical analysis, it utilizes fiscal data and corporate micro-data from the Guotai An database, with data trimmed at the 1st and 99th percentiles to eliminate outliers. The findings reveal that higher fiscal transparency significantly eases financing constraints by reducing information asymmetry, curbing rent-seeking, and improving regional credit environments, which in turn expands enterprises' accessible capital and stimulates greater resource allocation to innovation. Benchmark regression confirms a positive correlation between fiscal transparency and innovation investment, with heterogeneity analysis showing a more pronounced effect on small and medium-sized enterprises. Robustness tests validate these results. This research enriches relevant theoretical studies and offers policy insights for governments to enhance fiscal transparency, optimize financing environments, and boost corporate innovation capabilities, while providing practical guidance for enterprises in formulating financing and innovation strategies.
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W Wang (2025) studied this question.
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