Monetary policy, enterprise financialization, and technological innovation

Utilizing monetary policy to promote technological innovation is a key strategy of the central governments of various countries. However, enterprise financialization as a spillover effect of monetary policy, has an inhibitory effect on corporate technological innovation. This study employs data from Chinese listed companies in non-financial and non-real estate sectors (2007-2023) to construct an empirical model. Using mediation and moderation effect measurement methods, we find that: Quantity-based monetary policy has a significant positive impact on technological innovation; Price-based monetary policy tools are difficult to produce practical effects; Enterprise Financialization exerts a certain inhibitory effect on technological innovation, which is evident in the overall model and in subgroups based on ownership nature, financing constraints, and innovation intensity. Due to real estate collateral dependency in innovation financing, financialization that is biased towards real estate assets can promote technological innovation. For policy recommendations, we suggest introducing targeted innovation financing and establishing a patent intellectual property value assessment system to drive the continuous deepening of technological innovation.