Research On The Effect Of Government Subsidy On The Smooth Effect Of Cash Holdings Innovation Investment

Innovation is an important force to push forward the development of a country and a nation.With the gradual reform of economic system in our country to adapt to the new normal trend of economic development,the country has more and more attention to the important role of scientific and technological innovation on industrial structure adjustment and the promotion of national competitiveness.To ensure the leading position in the global economy,it is necessary to produce continuously of innovative products,in order to ensure the sustainable development of economy at the same time to realize the innovation of sustainable development to resources from the drive industrial structure development to innovation driven industrial structure.Among them,enterprise innovation has become backbone to promote national innovation.Manufacturing industry as a pillar industry of the country,directly reflects the productivity of a country,this paper based on the background of manufacturing enterprises using the cash holding to ensure that continuing the development mechanism of action,and study the regulation of property rights and government subsidies for R&D smoothing.Firstly,this paper sorted out the cash holdings of R&D investment,government subsidies to ease the financing constraints and the nature of the property rights and other aspects of the literature,review.Secondly,this paper defined the concept of government subsidies,property rights and R&D smoothing.Subsequently,based on the innovation theory,enterprise financing theory and market failure theory,analyzing the different nature of property right of enterprise use cash holding smooth R&D investment motives,and the government subsidies to enterprises with different properties using cash holdings smooth R&D investment has different degree adjustment role assumptions.Thirdly,this paper used 2007-2014 annual listing of the A shares of manufacturing companies as samples and System GMM.The results showed that:(1)companies will use cash holdings to smooth R&D investment;(2)compared with the state-owned enterprises,private enterprises with cash holding better effect of smooth R&D investment is obvious;(3)government grants through its direct and indirect financing effect,easing the financing constraints,thereby weakening corporate cash holdings smooth R&D investment effect,the negative to the regulatory role in private enterprises better obviously.Finally,the paper puts forward some relevant policy advice such as the enterprises should set up R&D cash reserve system,the government support funds should choose the right investment direction and pay attention to the game relationship between the government subsidies and the enterprise capital management.The innovation of this paper lies in that the government subsidies as a source of funds of the enterprise's R&D activity,in addition to guide investment in innovative enterprises,can also on the different nature of the property companies use cash holdings smooth R&D investment negative to the regulatory role.So,we should pay attention to the external effects of government subsidies and seek the balance between the government support policies and the micro management of enterprises.