Can industry-finance cooperation firm enhance total factor productivity: evidence from listed companies

Industry-finance cooperation is a key step for advancing financial reform.It is of profound significance to study the mechanism and policy structure of industry-finance cooperation.Taking China's industry-finance cooperation as a quasi-natural experiment, the difference-in-difference (DID) approach is used to analyze listed enterprises from 2013 to 2020.We find that industry-finance cooperation promotes enterprises' total factor productivity (TFP).To bolster the credibility of empirical results, we conduct a series of robustness checks, such as the parallel trends assumption verification, placebo test, and alternative variable definitions.To control for endogeneity, we further utilize methods such as PSM-DID and instrumental variable estimation.Our findings indicate heterogeneous effects: industry-finance cooperation exerts a stronger impact on TFP for (1) state-owned enterprises, (2) capital-intensive and traditional manufacturing firms, and (3) enterprises located in provincial capitals or central cities.Furthermore, industry-finance cooperation is to improve TFP by reducing the R&D expenditure, improving the investment efficiency, and reducing the internal costs.In light of the foregoing conclusions, the Chinese government should continue advancing and refining the pilot and mechanism of industry-finance collaboration.By adopting a localized policy approach tailored to regional conditions, it can better leverage finance's role in bolstering the real economy.