Goverment Subsidies,Equity Concentration And Enterprise Innovation

Innovation is the source power to improve the competitiveness of the country and enterprises,but the innovation activities of enterprises usually cause market failure due to strong externality and knowledge spillover.Government subsidy policies that have the function of market regulation can correct the phenomenon that enterprises lack the willingness to innovate to some extent by alleviating financing constraints,reducing innovation costs,signal transmission and other effects.However,in terms of the known government subsidy policies,different enterprises will have different innovation motives,and enterprises with different shareholding structures will have different policy selection behaviors.In order to open the ‘black box' where government subsidies have different effects on enterprise innovation,and deeply explore the behavior choices and effects of enterprise innovation,this thesis,according to the different results of innovation output,divides enterprise innovation into strategic innovation and substantive innovation,which draws on the methods proposed by Li Wenjing and Zheng Manni(2016).The substantive innovation is measured by the number of invention patents with high technical difficulty,and the strategic innovation is measured by the number of non-invention patents with low technology difficulty.Then,the thesis also empirically examines the influence of government subsidies on enterprise innovation and the moderating effect of ownership concentration in this process from two dimensions of substantive innovation and strategic innovation.Selecting the A-share listed companies that are continuously operated in Shanghai and Shenzhen in 2010-2017,this thesis carries out regression analysis on the panel data and finds: 1)There is a significant positive correlation between government subsidies and enterprise innovation,and on the whole,the analysis shows that the government subsidies have the effect of promoting innovation.2)There is a significant negative correlation between equity concentration and corporate innovation and substantialinnovation,but it is significantly positively correlated with strategic innovation.The analysis shows that enterprises with high concentration of shares often lack the independent professional decision-making ability of professional managers,and long-term technical ambitions,are unwilling to engage in high-risk technological innovation activities.Thus,in the development decisions of enterprise,those enterprises will avoid innovative activities,or prefer to carry out duplicative or simple non-innovative activities.3)Equity concentration has a negative adjustment effect on the correlation between government subsidies and enterprise innovation.Equity concentration has a negative adjustment effect on the correlation between government subsidies and substantive innovation.However,equity concentration has a positive adjustment effect on the correlation between government subsidies and strategic innovation.The analysis shows that the promotion effect of government subsidies on innovation will be restricted by the value orientation of corporate control entities.The second type of agency problem brought about by the concentration of shares is likely to weaken the marginal contribution of government subsidies to enterprise innovation.Government subsidies for companies with higher equity concentration mainly promote the increase of non-invention patents,innovation quality has not improved significantly.High-equity concentration enterprises have the motivation to pursue the number of innovations and ignore the quality.It will have an extrusion effect on substantial innovation.The above conclusions provide theoretical and empirical basis for opening the ‘black box' of government subsidies and further improving China's innovation drive mechanism and constraints.