Dynamic Effects of Patient Capital on Firms’ Total Factor Productivity

Abstract

This study constructs an econometric framework using firm-level microdata, with long-term capital inflows as the shock, to systematically evaluate its impact mechanism on firm total factor productivity. Methodologically, it employs a staggered double-difference model to effectively capture the dynamic effects of different firms introducing long-term capital at varying points in time, while incorporating multiple productivity estimation methods for robustness testing. Furthermore, the paper constructs a mediation model to delineate transmission pathways through two dimensions: technological innovation quality and comprehensive performance indicators. Results indicate that long-term capital inflow significantly enhances corporate productivity, with this conclusion remaining robust across different model specifications and proxy variables. Mechanism analysis reveals that, compared to the single technological innovation pathway, comprehensive performance improvement plays a more universal mediating role in efficiency enhancement. Heterogeneity analysis further validates the applicability of this methodology across industries, regions, and firm sizes. The proposed research framework demonstrates strong generalizability in identifying the effects of long-term capital, offering a replicable modeling approach and analytical paradigm for related empirical studies.