Study On The Effects Of Government Subsidy Towards Innovation Performance

Innovation is an important driving force for national development.The fundamental way of achieving industrial structure'optimization and transformation lies in innovation.Strategic emerging industries are driven by innovation,which is one of the pillar industries of Chinese economic.Innovation activities have the characteristics of externality and high risk,which can demotivate enterprise,research and development activities.Relying solely on market mechanisms to regulate innovation activities will lead to inefficiency,which will cause the emergence of"market failure".In order to correct the lack of innovation investment caused by"information asymmetry"and"market failure",a series of subsidy policies and measures have been formulated by governments around the world.The research conclusions about the impact of government subsidies on the innovation performance of strategic emerging industries are inconsistent.Besides,research on ways of government subsidies affecting innovation performance of enterprises is rare.Based on this,this paper focuses on the impact of government subsidies and enterprise R&D investment on innovation performance in strategic emerging industries,and tries to verify the mediating effect of enterprise R&D investment.Firstly,this paper defines the relevant concepts,and analyzes and summarizes related literature.Secondly,this paper explores the necessity of government policies for encouraging enterprises to engage in innovative research and development activities by using theoretical basis of"public goods","enterprise resource theory","external","information asymmetry"and so on.Meanwhile,the development situation of this industry is analyzed.Finally,the influence of government subsidy and R&D investment on innovation performance is analyzed by using panel data of 748 listed companies of strategic emerging enterprises in China from 2011 to 2017.The results of this paper show that government subsidies can improve the net return on corporate assets and promote the innovation performance of enterprises by the way of stimulating enterprises to increase investment in research and development.The mediating effect accounts for 49.93%of the total effect.In addition,capital intensity,equity concentration and the enterprise scale also have a significant impact on Innovation performance.Finally,reference measures are given based on the results in order to improve the government subsidy system and the independent creative ability for the enterprise.