Research On Government Subsidy,Innovation Efficiency And Corporate Risk Taking

As China's economy has entered a new normal,the key to changing the growth model is to thoroughly implement the innovation-driven strategy and promote supply-side structural reform.As the basic unit of market economy,Chinese firms have to deal with the challenges brought by environmental uncertainty externally and bear the pressure of survival caused by rising costs internally.The internal and external troubles under the transition economy have formed a great test for the financial decision-making of firms.As an important financial behavior of firms,corporate risk taking(CRT)is firms' tendency of willingness to pay the price during the process of chasing high profit,reflecting the firms' choice about expected earnings and its volatility.CRT is of significant importance in the long-term growth of the national economy,the promotion of TFP,as well as the firms' capital accumulation.In order to make up for market failure and promote the development of firms,government subsidy is an important tool of fiscal policy.Especially under the current economic downturn in China,government subsidy is particularly necessary to alleviate the financing constraints of firms and promote their risk taking.In recent years,the amount of government subsidies in China has been increasing and the coverage has been expanded year by year.However,due to the influence of internal and external factors of firms,there is no consensus on the effectiveness of government subsidies.The problems about how to improve the implementation effect of government subsidies and promote the high-quality development of firms needs to be solved urgently so as to coordinate the effective allocation of policy resources and the and the integration of internal resources of firms.Based on the current development characteristics of China and the internal and external problems faced by firms,this paper explores the relationship between government subsidies,innovation efficiency and CRT by combining normative analysis and empirical test.This paper mainly includes seven chapters that are three levels of research content.Firstly,it provides a solid theoretical and practical basis for the research of this paper by using the concept definition,literature review,theoretical basis and institutional background analysis.Secondly,based on the assumption of competitive government subsidies and firm risk exposures,it verifies that the government subsidies can promote firm risk bearing,be providing cash directly,strengthening firms' faith,certifying the outstanding firms to outside investors.Combined with the grouping test of property right nature and corporate governance factors,this paper further analyzes the heterogeneity of the relationship between government subsidies and corporate risk taking in different internal scenarios.Besides,it expands the economic consequences of innovation efficiency(IE).In addition to the existing research conclusions,the paper finds that firms with high IE are more likely to be engaged in financial decision-making with high risk for high IE contributes to cost reservation and reduction internally and release positive signals externally.What is more,from the macro,meso and micro view,the above conclusion varies according to the degree of marketization,industry type and the nature of firms'property rights.What is more,in order to further verify the role of government subsidies in the context of innovation-driven development,this paper explores the way through which government subsidies influence the CRT.Finally,based on the above conclusions,combined with the thoughts from both macro and micro levels,the paper provides feasible suggestions for the government to improve the institution design and for corporate innovation management and financial decision-making.Different from previous studies,this paper takes the whole process of innovation into consideration comprehensively from the prospect of IE.It verifies the mediating effect of innovation efficiency between government subsidies and CRT,and provides micro-level empirical evidence for the government to improve the effect of subsidies implementation and for firms to specify the internal development direction to obtain sustainable competitiveness.On the basis of theoretical analysis,this paper constructs a logical framework for government subsidies,IE and CRT,and draws the following conclusions through empirical tests:(1)as the direct cash flow provided by the government,government subsidies contribute to the increase of CRT,and the above conclusions are more significant in non-state-owned firms,firms with one person not being both chairman and general manager and firms with lower concentration of equity.(2)firms with high IE tend to make high-risk financial decisions.Firms with high innovation efficiency can help firms to reserve internal resource and obtain external investment to engage in high-risk financial behaviors by reducing internal costs,obtaining excess returns and transmitting positive signals.In addition,on-state-owned firms,high-tech firms and firms with a higher degree of marketization are more capable of taking full advantage of IE to enhance risk taking.(3)IE plays a partial intermediary role in the process of government subsidies promoting CRT,that is,government subsidies can achieve the goal of promoting CRT by improving IE.Combined with further research,it is found that the mediating effect of IE is more significant in non-state-owned firms and firms in regions with higher degree of marketization.The contribution of this paper lies in:firstly,it enriches the research on the interaction between macro policies and micro enterprises and its applicable scenarios.In view of the limitations of the existing research on enterprises in specific industries,this paper takes a-share listed companies as the research object,which improves the applicability of the research conclusions.In addition,the company's internal governance supervision mechanism and external institutional environment are incorporated into the research framework between government subsidies and CRT,further exploring the heterogeneity of conclusions in different situations,and expanding the situational study of macro policies and enterprise micro behaviorsSecondly,according to the research logic of firm competence influencing firm behavior,the micro influencing factors of firm financial behavior are enriched.Existing research on micro level mainly inspects the influence of corporate governance factors on CRT.Based on the competitive advantage theory,resource-based theory and signaling theory,this paper embarks from the whole process of corporate innovation and builds the research framework of IE affecting CRT.Combined with the above findings,the paper studies the specific situation of the macro and micro levels.It not only provides a driving force for firms to improve quality and efficiency,but also provides a practical path for firms to enhance risk taking.Further,it explores the path between government subsidy and CRT.Based on previous studies,this paper examines the mediating effect of IE between policy subsidies and CRT,and further classifies and inspects combined with the specific internal and external situations of firms.This paper not only explores a new path for policy subsidies to influence CRT,but also enriches the applicable scenarios of practice paths.Finally,this paper expands the research on the way that government subsidies affecting CRT.It tests the mediating effect of IE between policy subsidy and CRT.Further combination of internal and external specific scenarios of the enterprise to conduct a classified investigation,this paper not only reveals the policy subsidies affect the new path of enterprise risk taking,but also enriches the applicable scenarios of the practical path.