An Empirical Studv On The Effect Of Insti-Tutional Environment And Policv Incentives On Private Enterprises’ R&D Investment

The theory of modern economic growth(Romer,1990)shows that technological progress is an important factor of the country’s economic growth and R&D is the main source of technological innovation.According to the executive department,R&D can be divided into enterprises,research institutions,institutions of higher learning and other departments.From the practice of each country,enterprises have occupied absolute dominance in the four types of R&D activities at present.In the environment of sustained economic growth,the status of private enterprises improve more quickly than those of state-owned enterprises.And they have become the backbone of technological innovation because of a more market-oriented environment,so research on them has a more typical academic significance.This paper will focus on the impact of government’s institutional environment and the policy incentives on the R&D investment of private enterprises.Since the 1950s,academic circles at home and abroad have studied on the impact of the institutional environment and policy incentives on R&D investment of private enterprises from a number of angles and they have obtained some valuable results.Foreign researches are of great reference value to our researches cause they started earlier.However,their background wasn’t based on China’s national conditions so it’s no good to completely learn from them.Domestic literature fits the present situation but the system is immature and the research is always macroscopic theoretical analysis instead of quantifying key factors.These academic advantages prompted me to have the idea of in-depth study and laid the foundation for the premise of this argument.Combined with the actual situation of R&D investment of private enterprises in China,this paper draws lessons from the related research results at home and abroad and studies three issues specifically.The first step is looking into the current situation of the institutional environment and the policy incentives implemented by the government for the R&D activities of private enterprises.The second step is to establish the unbalanced Tobit random panel model based on the data of A shares private enterprises(excluding financial,insurance and ST)from 2004 to 2014 and to test the theoretical hypothesis of the influence of institutional environment and policy incentives on R&D investment of private enterprises.The third step is to explain the effect and mechanism of institutional environment and policy according to the empirical results.Then discuss the way for government to use institution and policy tools to provide private enterprises a more favorable en-vironment to develop R&D activities.At last,weve obtained the conclusion.On the one hand,the role of the institutional envi-ronment is more based on the overall level of the region.That means it has a more long-term sig-nificance and less impact on small individual enterprises.On the other hand,policy incentives have the advantages of individuality and quickness,but the implementation cost and difficulty of policy incentives are higher.Due to the reason that the size of most private companies is less than that of state-owned enterprises,our government should not only implement targeted policy incen-tives flexibly but also develop institutional environment as supplement to achieve innovation goals.