Impact of the Establishment of Free Trade Area (FTA) on Corporate Innovation
DOI:
https://doi.org/10.54097/pfkwrd24Keywords:
FTA establishment, government subsidies, financing constraints, corporate innovation.Abstract
This paper explores the impact of the establishment of FTA on corporate innovation and its mechanism of action using panel data of A-share-listed firms from 2008 to 2021 using the double difference method. The empirical findings show that the establishment of FTA can promote corporate innovation. And government subsidies can strengthen this promotion relationship, while financing constraints alleviate corporate innovation. The heterogeneity test finds that executives with overseas background and high-tech enterprises have alternative effects on enterprise innovation. The ownership nature of firms established in FTA that are non-SOEs plays a stronger role in promoting firm innovation. The empirical results of this paper provide some reference for the country to further broaden the scope of FTA in the future or how to utilize policies to promote enterprise innovation.
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