Impact Of Subsidies, Research And Development On Business Performance

BACKGROUNDIn the background of science and technology first, seizing the commanding heights of the global economy through technological innovation has become the unanimous choice of the world. Our government trend of the times, the party’s17report "Improving the ability of independent innovation, to create a new country", making the decision to develop new industries; party’s18report to make economic development more emphasis on strategic emerging industries. Compared with traditional industries, emerging industries depend on technology and innovation, represent the future direction of economic and technological, may become a pillar industry of the people’s livelihood. Government has launched a series of policies to promote the development of strategic new industries, with a great efforts of government subsidy. how to effectively use it has become an urgent problem. Meanwhile, R&D activities is a driving force and source of technological innovation, emerging strategic industries’capacity for independent innovation is weak and investment in R&D funding is inadequate, which severely restricts the rapid and healthy development of strategic new industries. An important reason for the generally low level of R&D is the presence of knowledge spillovers. By giving these enterprises subsidy to compensate for the loss and increase R&D investment, these enterprises have become the main R&D to improve business performance and enhance the level of the national innovation. So, study the actual effect of government subsidy, R&D on business performance is very important.PURPOSEBased on the characteristics of strategic emerging industries, from two angles subsidy and R&D to study "how subsidy affects business.performance","how R&D affects business performance" and "through R&D, how subsidy affects business performance". Though the theoretical analysis and empirical study, we can measure their status of strategic emerging industries, and put forward policy recommendations to promote subsidy policy.MAIN CONTENT AND VIEWThe first chapter is an introduction of this paper’s background and significance, tells the necessity of government subsidy, R&D for business performance and points out the contribution on research methods, ideas, content and structure. The main purpose of this chapter is to enable the reader to the writing background and the overall framework, paving the way for the following.The second chapter is the literature review. Firstly, defines the definition from domestic and foreign scholars of strategic emerging industries, government subsidy and R&D, points out their range, according to the availability and integrity of the data; secondly, around the three areas:subsidy affects business performance, R&D affects business performance, through R&D, subsidy affects business performance make comments from domestic and foreign research literature, make detailed description on positive or negative impact on business performance and subsidy is incentives or not for R&D. this chapter is to raise and resolve the foundation and theoretical basis of this literature research questions.The third chapter is the theoretical analysis, which analyze the effect on business performance from subsidy, independent R&D. The perspective of social development and the development of new industries themselves illustrate that the existence of subsidies and research and development is necessary and point out the existence of subsidies through R&D affect business performance is possible.The fourth chapter is the empirical study of this article. This paper proposed three supposes;(1) government subsidies can significantly enhance business performance,(2) independent R&D can significantly enhance the business performance,(3) through incentives for R&D, subsidy can enhance business performance. Section II is the data collection, from the concept plate of the great wisdom and hexun networks, according to specific categories of strategic emerging industries,33concept of957shares of listed companies have been selected as the initial samples. Section III describes the variable definitions and the model design. Section IV and Section V is the descriptive statistics and correlation analysis section of this paper. Section VI is the part of the regression analysis, verification the impact of subsidy and R&D on business performance, as well as the effect of subsidies through the R&D on business performance. suppose one and suppose two are proven, but suppose three is not or not fully been verified.The fifth chapter is the conclusion and recommendations, the main conclusions of this paper suppose one and suppose two are proven, but suppose three is not or not fully been verified. Section II is the recommendations to improve our current subsidy policy based on theoretical analysis and empirical results. Section Ⅲ pointed out in this paper, the study sample, the measurement of choice and the segmentation study should be more considered in the future research in this area.CONTRIBUTIONS AND SHORTAGEThe main contribution of this paper is the follow three aspects. Firstly it differs from previous research literature which only focused on the effect of R&D on business performance. Secondly, this article introduce subsidy into the model of R&D and business performance. By influencing R&D, the subsidy can influence business performance. That is to say, through R&D, subsidy can influence business performance indirectly. Study this area, we can understand fully and improve the current subsidy policy appositely. Thirdly, using the contingency theory to explain how the subsidy can influence the business performance by changing R&D.The paper’s shortages in this follow:Firstly, strategic emerging industries statistical system has not been established, so the data have a certain subjectivity. Secondly, the paper only considers the operating income of the subsidy may cause one-sidedness of the empirical findings. Meanwhile, the R&D data comes from three project, so the integrity is strong, but the consistency is weak.