How Does Venture Capital Transform Intellectual Property Protection into a Driver of Corporate Innovation?

How does venture capital transform intellectual property protection into a driver of corporate innovation? This study investigates this question by examining the transmission mechanism through which intellectual property policies influence the ambidextrous innovation of manufacturing enterprises, with a specific focus on the transformative role of venture capital as a financial intermediary. Utilizing panel data from Chinese listed manufacturing firms during 2014–2023, ambidextrous innovation is conceptualized along two dimensions: exploratory innovation and exploitative innovation. Empirical findings reveal that urban intellectual property protection policies significantly promote both types of innovation, particularly in firms with higher R&D investment intensity. Importantly, this study provides evidence for a transformative pathway: these policies enhance ambidextrous innovation in part by stimulating venture capital involvement, suggesting that venture capital serves as a potential mechanism through which institutional advantages are converted into corporate innovation outcomes. This research contributes to the literature by elucidating the financial intermediation mechanism through which intellectual property policy transmits its innovation-enhancing effects via venture capital.