Abstract
Using data from Chinese A-share listed companies from 2010 to 2017, this paper examines the impact of stock price idiosyncratic information on corporate innovation and explores the choice of corporate innovation strategies. It is found that stock price idiosyncratic information can optimize the efficiency of corporate resource allocation, alleviate financing constraints, and thus enhance corporate innovation. In addition, we also found that the choice of corporate innovation strategy changed with the fluctuation of stock price idiosyncratic information. Of course, the innovation effect of stock price information is heterogeneous across firms.
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