Targeted Poverty Alleviation and Corporate Innovation

In this paper, we take China’s A-share listed companies from 2016 to 2018 as the sample to investigate the impact of targeted poverty alleviation (TPA) on corporate innovation activities, concerning the wide participation of firms in TPA. We find that TPA by enterprises significantly increases their innovation. However, TPA does not increase the innovation investment through the input side, but significantly impacts the innovation quality negatively when the innovation structure remains unchanged. Further research shows that the positive effect of TPA on corporate innovation is partly due to the greater convenience of authorization. We make the first focus on companies participating in poverty alleviation and exploration on the black box of the patent application and authorization process. The findings not only provide a new perspective and new evidence for understanding the economic consequences of TPA in China, but also give new ways of thinking about the institutional factors influencing the corporate innovation quality. The government is suggested to be vigilant that some companies take advantage of TPA in some regions to get expedience, and that government-enterprise relations in some regions change from direct resource exchange to more subtle and destructive indirect behaviors.