Science and technology policy and corporate financing: evidence from China’s national industrial technology innovation strategic alliance

We examine the impact of science and technology policies on corporate initial public offering (IPO) outcomes in the context of pilot implementation of the China Industry Technology Innovation Strategic Alliance (CITISA). We find that CITISA significantly facilitates IPO financing by increasing the probability of IPO success and reducing underpricing. Mechanistically, this policy operates through three main channels: national credit endorsement, alignment with national strategic priorities and signaling of firms’ quality. Compared with other IPO firms, those admitted to CITISA demonstrate superior post-IPO performance, reflected in higher stock performance, analyst ratings, innovation outcomes and market valuation; improved operating results; and more active trading. This study contributes to the literature by underscoring the role of innovation policies in shaping corporate financing outcomes, providing novel evidence that China’s IPO market catalyzes technological innovation.