Government Intervention, R&D Subsidy And Independent Innovation Output Performance

This paper tries to provide theory for government intervention in independent innovation from market imperfections and national innovation system theory. Direct government intervention in independent innovation includes direct government investment and government purchases and this paper exams the impact of direct government investment in independent innovation which is the performance of R&D subsidies in independent innovation output. This paper extended in the way of measuring independent innovation performance, using entropy-weighted method to comprehensively combining province-level patents authorized, patents applied and added value of high-tech industries. Based on the knowledge production function and Cobb-Douglas production function, this paper sets an. Using the province-based data from1998-2011, we find that R&D subsidies, corporate R&D investments and R&D personal input are positively related with independent innovation production performance. Provincial R&D subsidies for independent innovation output performance elastic analysis shows that less developed western region the government R&D subsidies do not help much in independent innovation output, while in more developed mid and eastern regions R&D subsidies will positively improve independent innovation output, however, such a positive relation is weaker in the most develop region. The conclusion of this paper would have some political implication on the R&D subsidies.