Pledge to green: the green innovation effect of intellectual property pledge financing pilot policy

IP financing, which involves leveraging assets like trademarks, design rights, patents, and copyrights to secure credit, is gaining increasing attention in China. Against such backdrop, this paper investigates whether IP financing facilitates the green innovation by exploiting China's intellectual property pledge financing (IPPF) pilot policy as a quasi-natural experiment. Using difference-in-differences (DiD) method, we find that patent pledges spur green innovation, and this finding is robust across various robustness tests. Heterogeneity analysis shows that patent pledges mainly promote green innovation of companies with financial expert CEOs or those located in regions with weak Chinese clan culture or a lower degree of trade openness. The mechanism tests show that the impact of patent pledges promotes firms' green innovation mainly by increasing the accessibility of firms' bank loans. The results bear implications for discussions about the role of intellectual property on corporate innovation in emerging market countries.