Research On The Government Subsidies, Financing Constraints And R&D Investment

Nowadays, with the change in the world economy and the adjustment of international labor-division system, science and technology is a powerful factor of economic development and social progress, science and technology innovation has become strategic options to improve the innovation ability and the international status. In order to realize the strategy transformation, countries all over the world shift the focus of the development to the strategic emerging industries. The Government judged, based on economic trends at home and abroad, has developed a series of policy measures to develop strategic emerging industries. As basic composition of industry, the R&D investment enthusiasm of enterprise directly determines the level of industrial technology and the motive force of industrial development.However, R&D investment activities of main listed companies of strategic emerging industries is facing underinvestment and financing constraints, which restrict the development of strategic emerging industries. On one hand, because of the risk of R&D activities and the external effect of the R&D output, private benefits bring by R&D investment to enterprises is lower than social benefits R&D investment activities generated, which caused inadequate in R&D investment. On the other hand, because of the voluntary disclosure of R&D information and the confidentiality of R&D project caused information asymmetries in R&D activities between corporate and potential investors, R&D activities of main listed companies of strategic emerging industries is facing financing constraints. Under this circumstance, we need government to give remedy to strategic emerging industries by financial subsidies.This paper makes use of the date from main listed companies of strategic emerging industries which had disclosed R&D expenses during 2013-2014 in Shanghai and Shenzhen stock market, brings government subsidies, financing constraints and R&D investment into a uniform analysis framework, uses the method of normative research and empirical research, and tests the influence of R&D financing constraints problem in listed companies of strategic emerging industries and whether government subsidies can ease the R&D financing constraints. The results show that financing constraints problem restrict the level of R&D investment of main listed companies of strategic emerging industries in China. Government subsidies can alleviate R&D financing constraints problem faced by R&D investment activities of main listed companies of strategic emerging industries directly while not indirectly.Adverse selection and moral hazard caused by information asymmetries are the roots of R&D financing constraints problem. Improve the information disclosure mechanism of R&D investment, strengthen intellectual property protection of R&D output, and set up intermediary institutions to evaluate the R&D project can improve the symmetry of information between corporate and potential investors. Financial system oriented by indirect bank financing limit the financing channels of R&D investment activities. Encourage financial institution to provide financing services suit main listed companies of strategic emerging industries can expand financing channels. Government subsidies can alleviate R&D financing constraints problem faced by R&D investment activities directly while not indirectly. Increase government subsidies to main listed companies of strategic emerging industries and accelerate the process of financial liberalization can play the positive role of government subsidies fully.