Research On The Different Effects Of Government R&D Subsidies On State-owned Enterprises And Non-state-owned Enterprises

It is widely accepted that innovation is a significant source of productivity improvement and economic growth.More importantly,research and development activities are the indispensable tools in promoting innovation and enhancing international competitiveness.With the quick development of Science and technology,only the firms which continuously invest in R&D activities will hold advantage in the market.However,owing to spillover of R&D activities,firms can not have all benefits brought by R&D activities,which lead to the lower private rate of return than social rate of return.As a result,firms intend to reduce or postpone R&D investments.In order to lower the cost and risk of R&D activities,and boost R&D positivity.Governments of many countries provide increasing R&D subsidies to firms,Chinese government also provides a growing number of R&D subsidies to firms as well.Chinese firms include state-owned firms and private firms,they are different in characteristics and behaviors in R&D activities.This paper will introduce these two different types of firms and discuss two main effects including R&D input effects and R&D output effects,which are brought by government R&D subsidies and explore how these effects will influence firm R&D activities.In addition,this article will analyze whether there are any differences of these two effects between state-owned and private firms when receiving the equal R&D subsidies.The R&D subsidies in this paper only include government direct R&D subsidies,exclude indirect R&D subsidies,such as tax credit.This paper describes an empirical model which uses the panel data of Chinese high-technology industry from 2009-2015.The regression results are slightly different from the prediction,and demonstrate that the state-owned firms tend to have higher R&D input effects,while R&D input effects are insignificant in private firms.Generally,government R&D subsidies convey the direction of industry development,policy inclination and other messages.When state-owned firms obtain these messages,they will invest more in R&D activities.While private firms pay more attention to the requirements of market and its own development,in addition,private firms can only receive less R&D subsidies in the long run,therefore,they rely more on other factors,such as human capital and last year revenue.For R&D output effects,the effects of private firms are stronger than that of state-owned firms,new product revenue is used to measure R&D outputs in this paper.For private firms,Receiving government R&D subsidies are closely related to its R&D ability and innovation capacity,their R&D behavior are market oriented,so private firms have higher R&D efficiency.For stated-owned firms,principal-agent problem are complicated,this will lead to lower efficiency of stated-owned firms.Based on the theoretical and empirical analysis,the paper also puts forward some meaningful and practical recommendations to trigger firm's R&D activities and boost firm's innovation competitiveness.