Does credit asset securitization promote firm innovation?

Meng Liao

Applied Economics Letters, 2025, vol. 32, issue 6, 736-743

Abstract: This study investigates how bank credit asset securitization affects firm innovation using the difference-in-differences (DID) method. Using data from non-financial firms listed in China, we find that bank credit asset securitization significantly promotes firm innovation. The mechanism is that credit asset securitization can reduce the cost of credit financing, increase credit availability, and alleviate financing constraints for firms. Our research is the initial one to investigate the causal impact of credit asset securitization on corporate innovation utilizing data from China. This contribution augments the burgeoning literature on the relationship between the financial system and the real economy in emerging markets.

Date: 2025
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DOI: 10.1080/13504851.2023.2289384

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