Abstract
ABSTRACTThis study investigates the influence of regional intellectual property protection (IPP) on creative enterprises’ investment efficiency in China, and its influencing mechanism is also explored. For this purpose, we employ provincial level data of IPP along with micro financial data from 214 Chinese listed creative enterprises between 2007 and 2015. Consistent with our assumptions, we find strong and robust evidence that IPP has a significant and negative correlation with the investment inefficiency of creative enterprises especially those with private ownership. We also employ investment-cash flow sensitivity by using modified Tobin-Q model to examine the concrete mechanism of IPP, and the results show that IPP impacts creative enterprises’ investment efficiency advantageously by relaxing financing constraints rather than inhibiting agency issue. Taken together, this paper contributes that IPP can help alleviate private creative enterprises’ financing problem, which in turn improves the firms’ investment efficiency.
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