A Comparative Study On Jiangsu Government R&D Funding Ways Aimed At Enterprise Innovation

Currently, enhancing the ability of regional innovation has become the consensusof all the local government in China. It should be emphasized that the main subject ofregional innovation is enterprise. Enterprise innovation ability is directly related to theoverall regional innovation capability. Therefore, in order to promote the enterprise’stechnological innovation in the region, the government has introduced various policyand measures, of which R&D funding is one of the most important encourage policy.Basically, direct investment and tax preference are the major R&D funding waystaken by governments. Until now, most of the studies have focused on the validitycheck of single policy, while the comparative study on the two modes are very few.Especially, there is little research on the comparative study of the policy effectscaused by preference paths. Using direct investment and tax preference fromgovernment as the research subjects, this paper deeply and systematically conductedcomparative analysis of the two modes’ mechanism of action and the implementationeffect on innovation, hopefully to make up the deficiencies of the related insufficientstudy. Meanwhile, this paper gave rational analysis and evaluation on the practice ofpolicy carried out by Jiangsu province.Using characteristics contrast as a starting point of the research and combinedwith different motives for government investment, this paper distinguished theresponse to direct investment’s and tax preference’s objects. On this basis,technological innovation is divided into three stages. This paper will providetheoretical analysis the role of direct investment and tax preference in the three stagesand will respectively summarize the innovative incentive paths of the two policies.Besides, this paper carried out a comparative analysis of the practice of directinvestment and preferential tax policy in Jiangsu Province. By summarizing policyinput and policy configuration, this paper tries to put forward the trends and problemsexisted in Jiangsu policy input. Then, models are created respectively according to thedifferences exiting in direct investment and tax preference. This paper took horizontaland vertical methods to contrast the modulus of elasticity of two funding ways in thevarious stages, also tested two policies’ role in the input stage, intermediate outputstage and final output stage of technological innovation.Last but not the least, by combing the problems found in the study, this paperdraws the conclusion that: tax preference policy is better than direct investment infairness and policy effect. Jiangsu’s existing funding policy for R&D is mainly tax preference, which stays in line with expectations; with the direct input level muchlower than that of developed countries, we need to combine it with the meaningfulresearch activities and need to focus on social effect; currently, the effect of the twopolicies are weak, and the policy usage efficiency is not high; the study also foundthat human capital has the characteristics of increasing returns in certain stages ofinnovation. By finally providing policy recommendations according to the above fourfindings, this paper aims to optimize the allocation of resources, improve policy usageefficiency, smooth the realization of the economic transformation and upgrading, andenhance the ability of regional innovation.