Intellectual property protection and capital allocation efficiency

Rouhui Li, Yanbo Wang, Jianwen Zheng, Ruijun Wu and Xin Li

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: This study investigates the impact of intellectual property protection on corporate capital allocation efficiency. Using panel data from Chinese A-share non-financial listed enterprises between 2014 and 2022, we find that stronger regional intellectual property protection significantly enhances capital allocation efficiency. Mechanism analysis identifies three main channels: (1) incentivizing increased innovation input; (2) alleviating financial constraint; and (3) attracting analyst attention to improve information transparency. In addition, the positive effects are more pronounced in private enterprises and technology-intensive industries.

Keywords: Capital allocation efficiency; Intellectual property protection; Efficiency management; Institutional development (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s105905602500509x

DOI: 10.1016/j.iref.2025.104346

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