Registration System Reform and Enterprise Innovation: Evidence from a Quasi-Natural Experiment of the Registration-Based IPO System Reform Pilot in China

In recent years, the registration-based IPO system has been gradually introduced and promoted in China’s capital market, and its implementation effect has attracted considerable attention. This paper focuses on companies that were first listed between 2019 and 2021. We empirically investigate the impact of the registration system reform on enterprise innovation using the staggered difference-in-differences model, with R&D investment as the measure of enterprise innovation. The findings demonstrate that, in comparison to companies listed via the approval system, those listed via the registration system exhibit a higher level of R&D investment in the three years following listing. This suggests that the reform of the registration system effectively stimulates an increase in R&D investment among IPO companies. Furthermore, the reform of the registration system has been found to significantly promote the R&D investment of IPO companies on the STAR Market (i.e., the Science and Technology Innovation Board), while having no significant impact on the R&D investment of IPO companies on the ChiNext Market (i.e., the Growth Enterprise Board). Further analysis indicates that the registration system reform encourages IPO firms to increase R&D investment by reducing agency costs, alleviating financing constraints, and accumulating human capital. This study elucidates the impact of registration system reform on enterprise innovation and its mechanism and provides novel empirical evidence for the evaluation of the effect of registration system reform pilot.