More is less? Government overtime and corporate innovation

This study utilizes a unique dataset on local government overtime work, which is matched with financial information from listed firms between 2012 and 2023, to empirically investigate how excessive government intervention influences corporate innovation. The results indicate that an increase in local government overtime days is significantly associated with a decline in the number of patents obtained by enterprises. Further analysis reveals that this effect operates primarily through two channels: reduced market integration and diminished governance efficiency. In addition, heterogeneity tests are conducted across four dimensions: high-pollution industries, labor-intensive industries, firm size, and geographical location. These findings offer important policy implications, highlighting the need for governments to limit excessive administrative intervention in industrial upgrading and to foster an efficient, innovation-driven competitive market environment.