In recent years, against the backdrop of the wave of bond defaults restricting the normal financing of bonds, China has innovated the regulatory system and practical model of Credit Risk Mitigation tools (CRM). On the one hand, the allocation of CRM has been introduced at the bond issuance stage, through the way of “bond issuance + credit protection”, assisting enterprises to issue bonds successfully. On the other hand, bond underwriters have been advocated to concurrently act as CRM issuing institutions, urging them to actively play roles such as managing risks and participating in governance. Influenced by this, the scale of CRM in China has grown rapidly, facilitating the issuance of corporate bonds and restoring the credit of the bond market. Therefore, a scientific evaluation of the policy effect of CRM practices has practical implications for promoting financial innovation to serve the high-quality development of the real economy.

This paper aims to examine the effectiveness of CRM in serving the quality and efficiency of the real economy from the perspective of enterprise investment efficiency. It collects the data of CRM by listed companies from 2018 to 2022, and empirically tests the impact of CRM on enterprise investment efficiency. The results show that: CRM simultaneously reduces the degrees of under-investment and over-investment, and has a remarkable inhibitory effect on the inefficient investment of enterprises; CRM promotes enterprise investment efficiency mainly through mechanisms such as alleviating financing constraints and improving corporate governance; CRM has a more notable effect on improving private enterprises’ investment efficiency, and the larger the scale of CRM, the stronger the effect.

The marginal contributions of this paper are as follows: First, from the perspective of enterprise investment efficiency, it examines the role of CRM in the high-quality development of enterprises, providing useful insights on how to scientifically develop financial innovation to serve the quality and efficiency of the real economy. Second, different from previous studies that focus on the theoretical mechanisms of CRM product features, it notices the typical feature of the high overlap between the CRM issuing institution and the bond underwriter in China’s CRM practices, clarifying the specific mechanism of CRM’s impact on enterprise investment efficiency.