Targeted Poverty Alleviation and Enterprise Innovation: The Mediating Effect of Talent and Financing Constraints

Abstract Targeted poverty alleviation (TPA) conducted by the Chinese government has set a tremendous example for fighting against poverty. Using Chinese firm-level panel data, we design a quasi-natural experiment to investigate the relationship between TPA participation and enterprise innovation. We find that enterprises’ participation in TPA can promote innovation by attracting more talent and alleviating financing constraints. Further analysis reveals that the innovation-promoting effect of TPA is more pronounced for firms with higher media exposure, those located in regions with weaker intellectual property rights protection, areas with lower levels of merger and acquisition activity, regions with less developed financial markets, and non-state-owned enterprises. Enterprise participation in TPA further enhances total factor productivity and innovation efficiency. These findings provide insightful references for managers and policymakers regarding the effect of government-led corporate social responsibilities on corporate governance.