Does the high-tech enterprise certification policy promote innovation in China?

This study investigates the impacts of the high-tech enterprise certification policy on corporate innovation in China, by analyzing a unique dataset of listed companies and their affiliates from 2006 to 2015. We exclude firms certified after year 2009 from the sample, because they may have engaged in R&D manipulation. The findings show that the high-tech enterprise certification can promote corporate innovation in China, especially the innovation captured by invention patents and the intensity of policy matters. The study also concludes that the high-tech enterprise certification can influence enterprise innovation through ‘physical’ and ‘tacit’ channels. Heterogeneity analysis indicates that private enterprises, enterprises in more competitive industries, and equity-inspired enterprises benefit most from high-tech enterprise certification. This article helps understand the validity of innovation policies and driving forces of innovation.