How creditor protection stimulates corporate R&D: Insights from internet judicial auctions in China

Yunqing Tao, Qiaochu Wang, Jinqiang Yang and Yongwei Ye

Pacific-Basin Finance Journal, 2025, vol. 89, issue C

Abstract: This paper investigates whether strengthened creditor protection affects corporate R&D. Our identification strategy treats China's Internet judicial auction (IJA) as an exogenous shock to creditor protection and then adopts a staggered difference-in-differences (DID) estimation. The results show that IJA significantly increase corporate R&D. Mechanism analysis indicates that IJA increase loan availability of firms by lowering loan costs and improving loan scale, finally leading to an enhancement in R&D investment. In addition, this promotion effect is more pronounced among non-state-owned firms, firms in capital-intensive industries, and firms in highly competitive industries. Further analysis suggests that IJA can improve firms' patent output, productivity, and operational efficiency. Overall, our findings show that strengthening creditor protection through IJA can enhance corporate R&D investment.

Keywords: Creditor protection; Corporate R&D; Internet judicial auction (search for similar items in EconPapers)
JEL-codes: G32 K49 O32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:89:y:2025:i:c:s0927538x24003445

DOI: 10.1016/j.pacfin.2024.102592

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