Research On The Influence Of Financial Development On The Incentive Effect Of Government Innovation Subsidy

Promoting the development of financial markets and subsidizing R&D and innovation of enterprises is an important means for the government to promote enterprise innovation.Although the existing literature has done a lot of research on whether financial development and government subsidies are driving the R&D and innovation of Chinese enterprises,few documents also examine the impact of these two factors on R&D innovation of enterprises,especially the failure to examine the financial innovation to government innovation subsidies.The regulation of the stimulating effect.In view of this,this paper also examines the impact of financial development and government subsidies on R&D investment,focusing on the impact of financial development on government innovation subsidies.In terms of theoretical research,this paper first reviews the impact of financial development and government subsidies on R&D innovation of enterprises based on the existing literature.Then it analyzes the possible impact of financial development on the incentive effect of government innovation subsidies.It is found that financial development may affect The incentive effect of government innovation subsidies,but this impact is uncertain,because in terms of promoting enterprise R&D innovation,financial development has both a substitution effect and a complementary effect on government subsidies.The theoretical mechanism of the substitution effect is: First,financial system financing and government subsidies are external sources of financing for enterprise R&D innovation.Therefore,from the perspective of financial constraints,financial development has a substitution effect on government subsidies.Second,government subsidies are signaled.The mechanism that promotes enterprise innovation will also be weakened by the improvement of financial development level.The higher the degree of development of financial market,the stronger its information production and dissemination ability,and thus the less demand for government innovation subsidy signals.The theoretical mechanism of the complementary effect is: the funds needed for enterprise R&D innovation can not be met by the subsidies provided by the government,but should be solved through financing of the financial system.If the enterprise can obtain government subsidies,whether to increase R&D investment at this time depends on Whether to obtain sufficient financing from the financial market,in this case,the higher the level of financial market development,the greater the R&D investment that government subsidies incite,and the stronger the leverage effect.In the process of promoting enterprise innovation,whether the impact of financial development on the incentive effect of government subsidies is positive or negative depends on whether the substitution effect is strong or the complementation effect is strong.In terms of empirical research,this paper selects the data of listed companies in China's A-share market as a sample,establishes an unbalanced panel model,and empirically analyzes the impact of financial development on the incentive effect of government innovation subsidies.The first step is to use financial development index,per capita stock market value,per capita deposit and loan and per capita deposit and loan as proxy variables for financial development,and to analyze the financial development and government with individual government subsidies and regional per capita government subsidies as proxy variables for government subsidies.The impact of subsidies on corporate R&D investment and the impact of financial development on incentives for government subsidies.The second step is to empirically test the two influencing paths of financial development to the incentive effect of government innovation subsidies: the first is that financial development has an impact on the incentive effect of government innovation subsidies by improving the efficiency of information transmission;the second is the adoption of financial development.The conclusions of the study are as follows:(1)Financial development and government subsidies have a positive positive effect on corporate R&D investment;(2)Financial development will affect the incentive effect of government subsidies on R&D innovation of enterprises.With the improvement of financial development level,The incentive effect of government subsidies will gradually weaken;(3)Financial development can improve the efficiency of information production and transmission,and thus have a substitution effect on government subsidies.In addition,financial development can directly reduce the corporate financing constraints and thus have a substitution effect on government subsidies.The main contribution of this paper is that although the existing literature has done a lot of empirical research on how government subsidies and financial development affect enterprise innovation,it rarely examines the joint impact of these two factors on corporate innovation,and does not pay much attention to financial development to government innovation subsidies.The impact of the incentive effect;this paper focuses on this impact,and further studies the path of financial development affecting the incentive effect of government innovation subsidies.