Business Environment, Government Subsidy And Corporate R&D Nvestment

Innovation is vital for a country to achieve sustainable competitive advantages. Obtaining innovation output requires a lot of R&D investment. Enterprises contribute the most part of R&D investment. There are a lot of factors that will affect enterprise’s R&D investment, but we mainly study how government subsidies and business environment index influence enterprise’s R&D investment.The relationship of government subsidies, business environment index and enterprise’s R&D investment are theoretically analyzed. The data of the scientific research and technical services, manufacturing, information transmission, software and IT services companies of 2622 companies from 2010-2012 of A-share listed companies is used as sample to study how business environment and government subsidies affect R&D investment with Threshold Regression Model in this paper. The study found:(1)High Business Environment Index has a significant positive effect on enterprises’ R&D investment, and the effect for non-state-owned enterprises is greater than the state-owned enterprises;(2)The impact of government subsidies to R&D investment varies with the business environment showing a non-linear threshold effect.(3)The threshold effect shows some differences between state-owned and non-state-owned enterprises; In terms of state-owned enterprises, with the business environment index changes from low to high, the impact of government subsidies on R&D investment varies from positive to no significant effect; For non-state-owned enterprises, with the business environment index changes from low to high, that impact will change from negative to positive, and to no significant effect at last.For conclusion, in order to make the most use of government subsides’ effect, the policy of subsidy should be made according to the business environment index and the ownership of enterprise...