Research On The Performance Of Subsidizing Innovation For Chinese Strategic Emerging Industry

In the post financial crisis era，due to the difficulty of maintaining the traditionalgrowth pattern, industrial innovation has become the inevitable choice Chinesegovernment. The State Council in2010released the strategic emerging industrydevelopment plan, to support and cultivate energy-saving environmental protection,new generation information technology, biotechnology, high-end equipmentmanufacturing, new energy, new materials, new energy automobile industry, whichbecame a national strategy.The main way that government supports the development of strategic emergingindustries is the innovation subsidy. The Chinese government on strategic emergingindustry subsidies amount is huge, but the theorists lack a systematic research on thiskind of subsidy performance. This paper first reviews the relevant theories of strategicemerging industry innovation and subsidies, and then select the SME board and thesecond board market which have good representativeness for emerging industries ofstrategic importance as the research sample source, and we manually collect and sortthe system data of innovation input and output over the period2010-2012from thesefirms’ prospectus, regular reports, daily information disclosure information as well ascompany’s web site and so on. Secondly, constructing a translog production functionmodel which includes the innovation of government subsidies and the spillover effect,and with the share function equations, we estimate innovation subsidies on the outputperformance of Chinese strategic emerging industries’ firms since2010by iterativethree-stage least squares(IT3SLS) method. Finally, the strategic emerging industrycompanies are divided into manufacturing industry and service industry to becalculated output elasticity, and analyzed comparatively. This paper found:(1) bothR&D spillovers and companies’ output from strategic emerging industry subsidies aresignificant;(2) the output elasticity of government innovation subsidies are far lessthan the R&D spillovers output elasticity, and it embodies t hat the governmentinnovation subsidies have little effect on the output performance of single enterpriseitself;(3) Through the contrast of the output elasticity of manufacturing and serviceindustry, manufacturing companies have higher output elasticit y of innovationsubsidies and R&D spillover effects than companies in service industry, indicatingthat the efficiency of government innovation subsidies is better in manufacturing companies.