Research On The Effect Of Government R&D Funding For Enterprise's R&D Expenditure And Its Technological Innovation

As an emerging economy,China is in the middle and late stages of industrialization and economic growth momentum conversion superimposed period.It`s need to gradually get rid of the traditional development model like factor-driven,investment-driven and move towards innovation-driven.Enterprise is the main body of social technological innovation and the power to promote the progress of science and technology,which has been revealed by economic theory and social practice.However,due to the research and development activities carried out around technological innovation has a characteristic of public goods,there will be “market Failure”.If the whole society R&D supplied by private enterprises,the benefit from the R&D input does not match with the enterprise input,eventually leading to the whole society R&D investment below the optimal level.On this background,whether government R&D funding for enterprises to guide and leverage enterprises to expand their scale of R&D investment,play a positive leverage-effect,or crowding out private enterprise R&D expenditures? What is the effect of government R&D funding on technological innovation output? These two questions trigger the author to think,they are also the core study themes of this paper.Based on the theory of public goods,externality and innovation risk,the author mainly analysis on the mechanism and principle of "leverage effect" and "crowding out effect",which may be caused by government R&D funding for enterprise R&D activities.With the careful literature review on following four aspects: The necessity of government R&D funding,the empirical research on government R&D funding for enterprise R&D spending,the empirical research on the effect of government R&D funding for the output of enterprise technology innovation,the influence factor on government funding effect.This paper mainly focuses on the following four aspects:1.The study on international experience and domestic practice of Government R&D funding.Comprehensive use of methods of qualitative and quantitative analysis,historical analysis and comparative analysis,the author systematically reviews the international experience and domestic practice of government R&D funding.We will review the international and domestic government R&D funding behavior from the following three dimensions: R&D funding policy evolution,the typical R&D funding plan and fiscal expenditure on science and technology.In the history of international experience,select the global leader countries in technological innovation area: the United States,Germany and Japan as the representative.On the one hand,we have a detailed discussion on the situation and effectiveness of key government funded projects like as the ATP program and the TIP program(the United States),SBIR and STTR program(the United States),the special plan(Germany)and the basic science and technology program(Japan).On the other hand,analyzing the layout and configuration of government R&D funds in the fiscal expenditure on science and technology.The second half of this paper,we focus on the Chinese government R&D funding practice experience.Not only detailed introduces the implementation of typical funding plan,like National Science and Technology Major Plan,Key Technologies R&D Program,“863” Program,“973” Program,Spark Program,Torch Program,Innovation Fund for Small Technology-based Firms,National New Products Program ? But also investigate the government fiscal S&T resources allocation from the macro level,the central and local level and district level.It aims to provide useful experience and reference for the Chinese government's R&D policy and system through the historical experience of the government-funded policy evolution of the innovation-oriented countries,the typical R&D funding plan and the layout of government R&D funding.2.The study on the facts and theirs characteristics of government R&D funding with enterprise R&D expenditure and innovation output.Combined with qualitative and quantitative statistical description,this paper systematically outlines the facts and characteristics of the government R&D funding,the large and medium-sized industrial enterprises R&D spending and theirs innovation performances in China during 2005-2015.Mainly divided into two parts for descriptive study: enterprise R&D spending with the government R&D funding,enterprise technology innovation output with government R&D funding.From the perspectives of the enterprise`s whole situation,the property rights type enterprises(state-owned and private),enterprises of divided industries(31 manufacture industries)and enterprises for divided districts to look at and find the law evolution on the facts of the development and performance from government R&D funding,enterprise R&D spending and its technological innovation output on the recent 11 years in China's large and medium-sized enterprises.Which not only provides objective and direct perceptual knowledge for the previous theoretical analysis and historical practice experience,but also provides descriptive statistics for the follow-up empirical research.3.A study on the effect of Government R&D funding on enterprise`s R&D expenditure.For a long time,the effect on government R&D funding for enterprise`s R&D spending was an "leverage effect",or an alternative "crowding out" effect,most of the previous empirical conclusions are still ambiguous.This part is the empirical research,the main purpose is to solve or alleviate the controversy of this proposition with providing empirical evidence of Chinese enterprises.This paper selects the data of large and medium-sized enterprises in 28 manufacturing industries during 2005-2015 in China,designs the dynamic panel data model,and uses the Generalized Method of Moments(SYS-GMM)method to test the effect of government R&D funding.Further empirical,author also tests the "threshold effect" of government subsidy,constructs the Threshold Regression Model,and explores whether there is a threshold range of appropriate government subsidy strength,which makes the government subsidy the strongest effect,that is,and whether the government subsidy effect is valid Showing "inverted U" curve relationship.4.A study on the effect of Government R&D funding on enterprise technological innovation output.This part focuses on the effect of government funding for enterprise technology innovation output and the moderating effect of the key factors.On the basis of detailed theoretical analysis,firstly,this paper puts forward the hypothesis of the positive and negative effects of government funding on the output of enterprise technological innovation,meanwhile also puts forward the hypothesis with the effect of the control factors such as enterprise scale,enterprise technology level and the property right of enterprise.Then,based on the panel data of 28 large and medium-sized industrial enterprises in China from 2005 to 2015,this paper empirically tests the effect of government R&D funding on the technological innovation output represented by patent and new product revenue.In this paper,we put the government R&D funding,enterprise R&D expenditure and its technology innovation output into the same research framework.Examining the effect on government R&D funding,the main conclusions include the following aspects:Firstly,the conclusions about the Chinese government R&D funding,enterprise R&D expenditure and its innovation practice.Conclusion 1: in the last 16 years,China's rapid growth of fiscal S&T funding,accounting for more than 4% of the proportion of public expenditure,the growth rate is generally higher than the public expenditure,but in recent years,the growth rate fell significantly.Conclusion 2: local fiscal S&T funding is higher than the central government.The S&T finance resources allocation shows significant regional differences: the eastern regions which economic developed and innovation leaded financial resources strength is much higher than the central and western regions.Conclusion 3: the level of enterprise.R&D funding and enterprise R&D spending volume growth,but the growth rate continued to decline.State-owned enterprise`s R&D funding and theirs R&D expenditure is higher than the private sector.Conclusion 4: the level of enterprise.Government R&D funding for Industry and regional allocation is not balanced.The government funds are mainly concentrated in the capital,technology intensive and monopoly industries as well as economically developed regions of the enterprise.Rich Funded industries and economy developed regions of the enterprises to show higher R&D expenditure.But the more funded areas are not always accompanied by more enterprise`s R&D expenditures.Conclusion 5: the level of enterprise.Enterprise patents,new products and other innovative output have growth trend,but the growth rate also slowed.The output of state-owned enterprises is much higher than that of private enterprises,but the gap is narrowing.The distribution of industry and regional of enterprise innovation output is not balanced,the capital,technology-intensive industry output is significantly higher,the economy developed and innovation leading areas of enterprise`s output is also higher.Secondly,the conclusions about the empirical study on the effect of government R&D funding.Conclusion 1: government R&D funding has a significant incentive effect on the enterprise's own R&D expenditure,namely government funds can stimulate and leverage the improvement of enterprise R&D investment motivation,support the existence of "leverage effect",and do not crowd out of R&D expenditure.Further "threshold effect" test confirmed the existence of government funding intensity threshold,the optimal government R&D funding effect threshold interval for [2.64%,4.83%],when the government funding intensity in this interval,the "leverage effect" is the strongest.The government R&D funding effect presents "inverted U" curve relationship?Conclusion 2: Government R&D funding has a significant negative effect on enterprise's technological innovation output,no matter to the patent application or the new product sales revenue;The government funding has not effectively improved,but reduced the technological innovation output.The empirical results support the previous theoretical hypothesis that government funds have negative effects on the output of enterprise technological innovation.Conclusion 3: The R&D expenditure of the enterprise has a significant positive impact on its own expenditure,and the continuous and stable R&D investment of the enterprise plays an important promoting role.Conclusion 4: R&D funds supported from other sectors(financial institutions)in the current period have a "crowding-out effect" on enterprise R&D expenditure,and have a positive incentive effect lag.The Prime operating revenue and new product revenue current and lag significantly have a "leverage effect” which expands the enterprise's own R&D expenditures.Conclusion 5: The larger the size of the enterprise,the higher the proportion of state-owned property rights,the more likely to lead to inefficient government funding,while the higher the level of technology,the more conducive to a better effect of innovation of government funds.The main academic contributions embodied in the following three aspects:1.Expand the existing research perspective.In this study,we put the government funding for enterprise R&D spending and the effects on technological innovation into the same framework.On the one hand,government R&D funding,as a mean of intervention in the allocation of resources in the market,should play a guiding role in the capital,leveraging other social private capital to actively invest in R&D activities;On the other hand,As an investment in R&D activities,it should have an impact on enterprise innovation output.Most of the previous studies often only separately examine the government funded "leverage" or "crowding-out" effect,or separately examine its innovation output effect,Few and comprehensive inspection of government funding both effects,this study extends the existing research perspectives.2.Providing the realistic basis of relevant theories.Comprehensive use of methods of qualitative and quantitative analysis,historical analysis and comparative analysis,the author systematically reviews the international experience and domestic practice of government R&D funding.Systematically outlines the facts and characteristics of the government R&D funding,the large and medium-sized industrial enterprises R&D spending and theirs innovation performances in China during 2005-2015.For the R&D activities related to the theory of public goods,externality theory,and technology innovation theory and so on,we provide an empirical evidence for the performance of government funds and R&D activities in transitional emerging economies.3.To some extent,alleviate the academic controversy.Having the same truth with the fiscal expenditure policy could produce "leverage effect",can also occur "crowding-out effect".Whether the government's role in the enterprise is "the hand of support" or "the hand of plunder" has always been controversial in the academic circles.In this study,we find that government funding play a positive role in the expansion of R&D expenditure of enterprises and play a "leverage effect",which is the "hand of support",and existing an optimal government funding intensity interval.However,there is a significant crowding-out effect on the output of technological innovation.Thus,on the one hand,government funds can leveraging enterprises to expand their R&D investment,but on the other hand cannot improve the level of enterprise innovation output.Author has doubts about the efficiency of government funds in enterprises R&D activities,and also prompt stakeholders to think about how to make effective use of government R&D funds to avoid “the hand of plunder”.