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Accommodative monetary policy and corporate innovation: Evidence from the risk-taking channel

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  • Wang, Tingxi
  • Pian, Siyu

Abstract

Utilizing China's 2015 policy shift as a natural experiment, we examine how accommodative monetary shocks affect corporate innovation. Our results show that easing significantly boosts invention patents by 4.5% for "active innovators" (low subsidy reliance), while having no impact on passive innovators or non-invention patents. The risk-taking channel serves as the dominant conduit, surpassing the traditional balance sheet channel. By enhancing firm-level risk-bearing capacity, easing re-activates "out-of-the-money" growth options. Crucially, this stimulative effect is subject to a non-linear threshold, vanishing as firms approach survival constraints. Our findings underscore the necessity of reconciling macro-policy objectives with micro-level innovation motives and risk boundary conditions.

Suggested Citation

  • Wang, Tingxi & Pian, Siyu, 2026. "Accommodative monetary policy and corporate innovation: Evidence from the risk-taking channel," Finance Research Letters, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:finlet:v:102:y:2026:i:c:s154461232600646x
    DOI: 10.1016/j.frl.2026.110117
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