Does exploratory trademark strategy affect the cost of debt financing? Evidence from China

In this study, we investigate how exploratory trademark strategy affects the cost of debt financing. Using data from Chinese listed firms between 2005 and 2021, we find that firms adopting exploratory trademark strategies experience a lower cost of debt, highlighting the positive strategic value of trademarks. This effect is especially significant for firms facing higher competitive pressure, greater information asymmetry, and less easy access to external finance. In addition, supplementary analyses reveal that exploratory trademark strategy enhances attention and alleviates financing constraints. These results suggest that information risk and default risk are influential in determining the relationship between exploratory trademark strategy and debt pricing. Moreover, we identify a significant link between this strategy and debt maturity, indicating that firms adopting exploratory trademark strategies tend to have greater long-term debt capacity and less reliance on short-term debt. Our findings underscore the crucial role of trademark management in corporate financing, particularly in reducing firms debt financing costs.