Abstract: By making use of the patent citation data of listed companies, this paper empirically test the impact of information transparency on corporate innovation. The findings show that information transparency can boost corporate innovation in China. And this conclusion remains valid when instrumental variables are used to control the endogeneity. The findings of further analysis show that the innovation promotion effect of information transparency is achieved mainly through easing the constraints on innovative financing, rather than through giving full play to the governance. It can be seen that to relieve the restriction on corporate innovation financing is the main channel for information transparency to promote innovation. Meanwhile, the improvement of information transparency has increased the management’s attention to the short-term performance and brought about information leakage risks, which has weakened the promotion effect of information transparency on corporate innovation to some extent.

Key words: information transparency, patent citation, financing constrains, management myopia, information leakage risk