A Research On Financial Subsidy Policy Efficiency To Increase The R&D Activities Of Corporates

With the development of the world economy, governments were awaring of theultimate source of sustained economic growth is scientific and technological strength,research and development (R&D) is the most creative part of scientific and technologicalactivities. Therefore, governments were considering policies of how can they betterimprove their scientific and technological strength. Enterprises be acknowledged to themain body of the scientific and technological innovation in one country, and R&Dbehavior is a kind of public goods naturally, which need the governments’ appropriateintervention to compensate for defects caused by “market failure”, so the policy of R&Dsubsidies to the enterprises were widely adopted by governments, including ourgovernment. However, some data suggest that huge financial investment didn‘t getcorresponding return. Not only the scale and the strength of governments’ subsidies have aclear gap with the developed countries, but also have a downward trend year by year. Itshows that the probable reason of the low degree of enthusiasm of our governments’ R&Dsubsidies is the low efficiency of R&D subsidy. In this paper, in allusion to this macro levelproblems, I chose a more unique perspective which is the micro level, inspected the gameunder asymmetric information between the enterprises and government, depicted theenterprises’ benefit strategic behavior which defraud the governments’ R&D subsidy, gotthe conclusion of governments’ subsidies will generate "reverse" incentive, then revealedthe microscopic mechanism of the declining of governments’ enthusiasm, and the poorefficiency of subsidies.This article is divided into five major parts. The first part expounds the significanceand makes a literature review on the basis of the previous reading and combing theory andliterature. The second part collects the theory involved, including economic growth,financial R&D subsidy, game theory. The third part describes the R&D subsidy policiesand subsidies to the current situation of the domestic and Shandong Province, and makesempirical analysis, then points out some possible problems: the degree of governmentpublic spending incentives and China’s independent innovation impulses associated with isnot high or rather government public expenditure support for enterprise autonomy innovation is unstable, the subsidy is inefficient. Part IV analyses the causes of thisproblem with the method of game theory. Tries to depict a model: the microscopicbehavior of enterprises sending a false "creative types" signal to defraud the governments’R&D subsidies, and discuss the optimal countermeasure policy makers face adverseselection of enterprises behavior in the game equilibrium conditions. The fifth part,according to the results and the actual situation, makes some appropriate recommendationson how to adjust the financial R&D subsidy policy and to promote technologicalinnovation power using other supporting policies.