The　clawback　provisions　adoption　has　received　increasing　attention　in　recent　studies.　Based　on　US　setting,　several　studies　find　that　voluntary　clawback　provisions　may　impede　corporate　innovation.　Exploiting　a　policy　experiment　that　requires　SOEs　to　adopt　mandatory　clawback　provisions　in　China,　we　find　that　adopting　mandatory　clawback　provisions　enhances　corporate　innovation.　The　cross-sectional　tests　show　that　the　effect　is　stronger　in　firms　with　more　related　party　transactions　and　in　firms　with　less　institutional　investors,　suggesting　that　improving　corporate　governance　is　a　plausible　channel　through　which　clawback　provisions　affect　corporate　innovation.　Overall,　our　study　indicates　that　mandatory　clawback　provisions　may　play　an　active　role　in　countries　with　weak　corporate　governance.