Implementation of the Social Insurance Law, mismatch in investment and financing maturities, and corporate innovation

Abstract

This paper leverages the implementation of the Social Insurance Law as a quasi-natural experiment and uses listed companies from 2006 to 2021 as the research sample. A difference-in-differences model is constructed to explore the effect of the law's implementation on corporate innovation. The results indicate that the implementation of the insurance law significantly promotes corporate innovation, with the effect being more pronounced among non-state-owned enterprises, those with relatively dispersed ownership, and those operating in highly competitive industries. Further mechanism analysis reveals that the law facilitates corporate innovation by reducing the mismatch between investment and financing maturities.