Abstract
This study investigates the intricate relationship between China's Patent Pledge Financing Policy and the susceptibility of stock prices to sudden drops, emphasizing the government's pilot program. Utilizing the rigorous double-difference-in-differences (DID) approach, we undertook a comprehensive analysis of China's A-share listed companies. Our findings unambiguously reveal that the patent pledge financing policy significantly impacts the stability of corporate stock prices. Additionally, our research highlights the key role of technological progress as a mediating factor, strengthening the link between the policy and stock price steadiness. Our data further indicates that factors such as company size and ownership type influence the impact of the Patent Pledge Financing Policy on the risk of stock price crashes, with larger and non-state-owned enterprises benefiting more significantly from this targeted policy intervention.
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