Judicial protection of intellectual property and corporate innovation financing: An analysis of the mediating effect of patent pledge loans

Against the backdrop of deepening innovation-driven development strategies, enterprises' reliance on knowledge assets has significantly increased, yet the difficulty of financing intangible assets remains prevalent. Judicial protection of intellectual property is crucial for safeguarding the returns on technological achievements, reducing infringement risks, and enhancing credibility assessments by financial institutions. This study utilizes data from Chinese listed companies from 2007 to 2023 to empirically examine the impact of judicial protection of intellectual property on corporate innovation financing based on a difference-in-differences framework, further analyzing the mediating effect of patent pledge loans. The research finds that judicial protection of intellectual property significantly enhances levels of corporate innovation financing, a conclusion that remains consistent across various robustness tests. Patent pledge loans play a partial mediating role between judicial protection of intellectual property and corporate innovation financing. Additionally, corporate size moderates the relationship between judicial protection of intellectual property and corporate innovation financing. Heterogeneity analysis indicates that the promoting effect of judicial protection of intellectual property on corporate innovation financing is more pronounced in technology-intensive enterprises and non-state-owned enterprises (Non-SOEs). This study provides new empirical evidence for understanding how the institutional environment can encourage innovation through intellectual property financial channels.