The Impact Of R&D Subsidies On R&D Investments In Chinese Industry

Technology innovation is a major driver of economic growth. As a main enforcement of technical innovation, Enterprise R&D investment directly determines the overall technology level. The existence of technical positive externalities lead to enterprise’s R&D investment level is lower than the social optimum level, in order to encourage enterprises to intensify R&D, the government provides R&D subsidies to enterprises to overcome this technical positive externalities that lead to market failure. The ultimate goal of enterprise R&D investment is to obtain a higher rate of return, so, does this positive effect of government R&D subsidies to enterprise R&D investment exist? If the effect does exist, how can the R&D subsidies influence the R&D investment in a way? Rate of return is an important standard enterprise R&D investment, based on the view of rate of return to R&D, this paper tries to explore and analyze the effect of government R&D subsidies to the enterprise R&D investment and the path of the impact.First of all, we expounded the research questions, purpose and significance of this dissertation. Secondly, we summarized the existing relevant theoretical and empirical studies, and put forward the corresponding theoretical assumptions. We analyzed the R&D status of the current characteristics of R&D. Then, using the panel data from 2005 to 2013 of C hinese industry, we measure the industrial returns of R&D in C hina, based on the knowledge production function and the total production function. Finally, in the R&D of return perspective, we studied the relationship between R&D subsidies and industrial R&D investment in China with an empirical method.The main conclusions are as follows: firstly, there are clear differences in R&D returns between various industries in china. Because of the lower level of technology spillovers, Monopoly industries have higher returns on R&D. The higher the competitiveness are, the lower return on R&D. Secondly, the relationship of R&D subsidies to R&D investment is a U-shape, a small R&D subsidies crowds out the enterprise R&D investment. O nly when the subsidies reach to a certain scale, the positive impact will play a role. Thirdly, R&D subsidies stimulate enterprise’s R&D investments through influencing the rate of return to R&D. As a medium, the effect of return on R&D is obvious. At the same time, the enterprise has the lowest expected to returns on R&D, when the returns meet minimum expectations, the enterprises will increase R&D investments. Finally, Investment decision-making is different between different industries. The higher the degree of monopoly industry, R&D investment inertia, the greater the R&D investment scale decreases. In the long term, R&D investment inertia will affect the industry technology advancement as a whole. The higher the accumulation of industry knowledge, the easier it is to stimulate the industry to make R&D investment.To improve the level of innovation, stimulating enterprise R&D investment, based on the related research conclusion, we put forward relevant policy Suggestions: Firstly, the government should improve the system of intellectual property rights protection system. Making a strict standard of patent review, strengthen the construction of intellectual property protection laws and regulations. Increase the penalties of intellectual property infringement. Especially at the beginning of the high and new technological inventions, system should have the ability to protect the rights of technological inventions. Secondly, under the fiscal constraints, the government should intensify R&D subsidies. To carry out the R&D subsidy funds usage review. Improve the utilization efficiency of R&D subsidies. Increase R&D subsidy for small and medium-sized enterprises. Thirdly, to speed up the diversification of industry layout, promoting industrial competition. Establish an effective anti- monopoly measures, improve the market competitive.