Financial Subsidies And Enterprises' R&D Activities Of China's New Energy Automobile Industry

In recent years,with the consumption of petroleum energy and the intensification of environmental pollution,because of the characteristics of low energy consumption and low emission,new energy automobiles have gradually received attention and become an important opportunity for China to develop the automobile industry.So China has attached great importance to the development of new energy automobiles and has successively introduced policies,provided subsidies to support the development of this emerging industry.With high subsidies,the new energy automobile industry has developed rapidly.In 2017,the production and sales have exceeded 700,000 units.The proportion in the automobile market has increased year by year and has a bright future.However,can financial subsidies stimulate R&D activities of enterprises?Which subsidy method is more efficient?Whether enterprises will apply for and use subsidies honestly and which factors are more important for government to grant subsidies.These issues are worthy for discussion and they have become hot topics for many scholars in recent years.However,scholars have not yet reached a unified opinion on the relationship between subsidies and R&D investment,so the effect of subsidies is controversial.Some studies have shown that financial subsidies can stimulate innovation.Other have proved that financial subsidies have not produced significant results,or that the performance is far less than subsidy costs,and even some research shows that financial subsidies will cause welfare loss.Therefore,the impact of financial subsidies on enterprises is uncertain.This paper focus on the effects of subsidies and discuss various factors affecting the distribution of subsidies,then explains the current development of new energy vehicle industry,subsidy policy and R&D,analyzes the necessity of subsidies and the theoretical basis of subsidy incentives.Then this article establishes a game model to analyze the strategic choice between the enterprise and the government.The empirical analysis focuses on the subsidy effect and discusses the various factors affecting the subsidy distribution.Finally,some opinions on how to improve the subsidy are given.Based on the game model,this paper gets:When the company's camouflage costs are high and the government's punishment is strong,resources are allocated optimally and the market reaches a completely successful equilibrium,But at this time,the government will pay a higher supervision cost.When themarket is developing well,if the camouflage cost and punishment are reduced,the market isalso efficient and achieves a partial equilibrium of success.But when the market develops at a low level,reducing corporate camouflage costs and penalties will lead to inefficiencies,and companies can't get matching subsidies.In the empirical research,this article divides financial subsidies into direct subsidies and indirect subsidies to explore the effects of subsidies and influencing factors,but considering that the government has more discretion over direct subsidies,this article mainly focuses on direct subsidies and gets the following conclusions:(1)Financial subsidies can stimulate R&D activities of enterprises at this time.(2)The relationship between direct subsidies and R&D investment of enterprises is inverted U-shaped.(3)The incentive effect of direct subsidy is better than indirect subsidy.(4)There is a kind of complementary effect between direct subsidy and indirect subsidy.(5)When the government issues direct subsidies,it will be affected by some factors such as the size of the enterprise,the level of developmentand the capacity of liabilities.On the basis of the above analysis,this article mainly gives the following suggestions:(1)In the early stage of the development of new energy automobile industry,it should be encouraged to support new enterprises entering the market,but it is necessary to strengthen supervision and establish effective subsidies to ensure that enterprises apply for and use financial subsidies honestly.(2)With the development of this industry,the subsidy method should be changed to improve the innovation enthusiasm of enterprises.(3)When the new energy automobile industry matures,subsidies should be cancelled,but the transition period should be set to achieve reasonable cancellation and reduce the impact on businesses and markets.