Abstract: From the perspective of industry and finance integration, this paper investigates the effect of enterprises holding shares in non-listed banks on their technical innovations. It is found that the enterprises holding shares of the non-listed banks have more patents for innovations and other patent applications, indicating that holding shares of non-listed banks can help to increase the number of corporate technical innovations and improve the quality of the innovations; compared with the big enterprises and the enterprises located in regions with higher level of financial development, small enterprises and the enterprises located in the regions with lower level of financial development will have more significant effects of innovation when holding shares of the non-listed banks; further analysis finds that firms holding shares in non-listed banks can get more bank loans with lower costs, suggesting that holding shares in non-listed banks can affect the technical innovation mainly through relieving financing constraints. Besides, the technical innovations resulted from holding shares in non-listed banks can improve the corporate operational performance.

Key words: integration of industry and finance; holding shares in banks; technical innovation; financing constraints