Investment Subsidy,Output Subsidy And The Financing Of High-tech SEMs

Although venture capital institutions can make up for some financing gaps,due to the information asymmetry and externalities in the high-tech industry that lead to market failures,the industry is still under-funded.Government subsidies have been proved to improve the solvency of small and medium-sized high-tech companies and promote financing.However,due to problems such as excessive subsidies,lack of pertinence,and inadequate supervision,they are largely inefficient.The existing literature studies the impact of government subsidies on the financing of small and medium-sized high-tech companies.Most of them only considered credit financing,but did not include more extensive venture capital financing channels in the scope of research.Therefore,the agency issues in the financing process are rarely considered.Based on the principalagent relationship between entrepreneurs and investors,this paper constructs a financing model,analyzes the financing methods and financing gaps of different types of companies,and studies the impact of investment subsidies and product subsidies on the availability of funds under different financing methods.Finally,from the perspective of society,from the perspective of the entire industry,we compare the effectiveness of the two kinds of subsidies in corporate finance and social welfare.Through the model deduction and argumentation,this paper draws the following conclusions:(1)Compared to general financing,companies are more likely to obtain venture capital.(2)Both product subsidies and investment subsidies can reduce the difficulty of corporate financing.Compared with general financing,investment subsidies are more effective in reducing the difficulty of enterprises obtaining venture capital.(3)Compare the effectiveness of the two subsidy methods: From the perspective of promoting financing,unit investment subsidies have greater impact than product subsidies,and they also save more financial budget;if we consider both promoting financing and increasing total social welfare,the impact of the conclusion depends on the external investment return rate((?/(p_H)))of the project.When the investment return rate is below a certain threshold,the product subsidy is better than the investment subsidy.Conversely,the investment subsidy is better than the product subsidy.This threshold is a constant based on a specific industry segment.In other words,when the technology is relatively mature,the project success rate is higher,and then the investment return rate((?/(p_H)))is lower,the product subsidy is more effective than the investment subsidy;and for industries where the emerging technology is not mature enough,the success rate is lower and then higher return on investment((?/(p_H))),investment subsidies are more effective than product subsidies.