Research On The Effects Of Government R&D Subsidies On Enterprises’ Financing

Facing with economical restriction, which follows the export oriented development model with high investment, high resource consumption, high pollution and low productivity, China’s economic has begun to enter the “new normal”. Rebuilding the drivers of economic growth and making development model change from the extensive to the intensive have got more and more attention, since downside for economic growth became an indisputable fact. A feasible method is implementing the strategy of innovation-driven development, because technology innovation is not only the core driving force for long-term stable economic growth, but also the key for enterprises to gain technical advantage and build core competitiveness. Both government and enterprises pay great attention to promoting enterprises’ independent innovation ability.As research and development(R&D) activities are an important source of technology innovation, China’s enterprises have begun to increase R&D investment gradually recent years. However, the overall level of R&D investment is still low because of lacking financial support. In order to ease the financing constraints faced by enterprises,the Chinese government increased R&D subsidies to enterprises. It is the need for social capitals to support enterprises’ R&D investment because governments’ fund is limited,unable to meet enterprises’ fund demand. Therefore, how to help enterprises to obtain more external financing has become an important research topic.Characterized by externalities, high risk and information asymmetry, R&D investment is often subject to financial constraints and budget constraints. As “visible hands”, government subsidies can not only become an important source of enterprises’ R&D investment, but also may have a special impact on enterprises’ other financing.Followed the logic of theoretical analysis, empirical test, optimization mechanism andbased on a combination of normative approach and empirical research, this paper make the research on the effects of government R&D subsidies on enterprises’ financing.Specifically, in theoretical analysis, we firstly explain the relationship between R&D investment and the development of enterprises and summarize the characteristics of R&D investment. Then, based on public goods theory, information asymmetry theory and pecking order theory, we discuss the three paths(signaling effect, reputation system and performance improvement effect) through which government R&D subsidies affect enterprises’ external finance, and after that, we put forward the hypothesis that receiving government R&D subsidies increases enterprises’ access to external financing. At the same time, considering the effects of government R&D subsidies on enterprises’ financing may differ from enterprises which have different characteristics, we deeply analyses the roll of enterprise scale and industry characteristics played in the effects of government R&D subsidies on enterprises’ financing. Based on this, we put forward some corresponding hypothesis, providing the foundation for empirical test and optimization mechanism. In the part of empirical test, this paper selects data of A-share listed companies in Shenzhen Main Board, Small and Medium-sized Enterprise Board and Growth Enterprise Mark as sample to study the effects of government R&D subsidies on enterprises’ financing.Conclusions:(1) enterprises with a government R&D subsidies obtained more debt financing and equity financing than enterprises with no government R&D subsidies;(2) the positive impact generated by receiving an R&D subsidy is stronger for equity financing than for debt financing;(3) government R&D subsidies mainly promote the rate of debt financing through short-term debt;(4) the positive impact generated by receiving an R&D subsidy is stronger for small enterprises’ external financing than for large enterprises’ external financing;(5) the positive impact generated by receiving an R&D subsidy is stronger for high-tech enterprises’ external financing than for non-high-tech enterprises’ external financing.Finally, based on theoretical analysis and empirical test result, we put forward some practical suggestions for both government and management of enterprises which not only provided some references for government to optimize R&D funding system,but also opened up a train of thought for management of enterprises to make financing strategies.