Abstract
Using the quasi-natural experiment of staggered bankruptcy court establishment across China, this study examines the impact of bankruptcy reform on corporate breakthrough innovation. Results show that bankruptcy courts significantly facilitate breakthrough innovation, with particularly pronounced effects among firms in high-tech industries and competitive sectors, firms with prior innovation advantages, and non-state-owned firms. Mechanism analysis reveals that bankruptcy courts boost the supply of credit resources, especially long-term credit, providing stable financial support for technological breakthroughs. Additionally, stronger legal protection promotes R&D alliances, fostering breakthrough innovation.
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