Abstract: The start-up enterprises realize their entrepreneurial exit and obtain liquidity by transferring their equity to public equity or semi-public equity. However, the different effects of the two exit modes on corporate innovation are often ignored. Taking the venture enterprises supported by China's risk capitals as the sample, this paper conducts an empirical study based on the difference-in-difference and the difference-in-difference-in-difference models. The findings show that both transferring to public equity and semi-public equity can significantly promote corporate innovation, and the transfer to public equity has a stronger promoting effect, which is contrary to the information confidentiality hypothesis proposed by foreign countries. The result of the mechanism test shows that transferring to public equity and semi-public equity can alleviate external financing constraints and provide financial support for enterprises. However, the enterprises transferring to semi-public equity have stronger earnings management motives in order to transfer to public equity in the future, while the enterprises transferring to public equity have weaker earnings management motivation in order to maintain their reputation and facilitate refinancing. Therefore, compared to transferring to semi-public equity, transferring to public equity can better motivate enterprises to invest in long-term innovation activities. Moreover, the fact that the enterprises with strong innovative ability are more willing to transfer to public equity indicates that the proprietary costs of information disclosure do not offset the advantages of public equity in such aspects as financing, etc..

Key words: public equity, semi-public equity, innovation, information confidentiality