Research Of Government R&D Subsidy Intensity To Reduce The Crowding-out Effect

Numerous economic growth theory found that technological innovation is an important drivingforce for long-term economic growth.However, a long-festering problem in the area is the externaleffect of the technological innovation. Externalities cause private benefits and social benefits, privatecosts and social costs inconsistent, and thus appearing inadequate or excessive market supply andother adverse outcomes. The nature of Corporate’s R&D activities and the need of improvinginternational competitiveness make providing subsidies for corporate R&D activities as the of thecommon choice for Governments.For China, no exception, the subsidy funds increased year by year,efforts to support growing.All the countries hope through incentives induce businesses corporates to make more investmentin R&D activities, increase R&D scale, and increase the output of each unit of R&D subsidies,that is, to improve the efficiency of R&D subsidies.Among these, the most common problems facedis that the Government R&D subsidies will have a crowding-out effect. Due to higher prices, thepresence of a direct replacement and moral crisis of R&D subsidies inefficient, R&D subsidy can notplay enough incentives to induce companies to make more R&D efforts. Facing basic research hasno inadequate investment, funds imbalance geographically and many other problems, as a developingcountry,a substantial increase in capital investment in the short term is also not realistic.To solvethese problems, the most effective measure is to reduce the government R&D subsidiescrowding-out effect, put the funds into a rational allocation, and improve the efficiency of the subsidypolicy.This article analyze the factors that influence government R&D subsidies crowding-outeffect,including industries, enterprises and so on.On this basis,this article explores then bestgovernment R&D subsidie intensity to reduce the crowding-out effect to China’s high-tech industryexample. Use panel data of21industry segments in the high-tech industry in2004-2010as thesample.Then use the fixed effects model and combine with the characteristics of industries andenterprises as the dependent variable, the ratio of R&D investment, government subsidies, and thespeed of technology diffusion, R&D personnel proportion, firm size, the proportion of the outputvalue of state-owned enterprises as independent variables multiple regression analysis. After analysis,the result of the high-tech industry in general government subsidies proportion attributable to the R&D funds total is about0.8%, lower than the actual proportion of government subsidies. This can helpour R&D subsidy policy makers in some way.