Research On The Effect Of Government Innovative Subsidy On Companies’ Innovative Input

Since the beginning of the 21st century,the scientific and technological revolution around the world has scored a major victory,and technological breakthroughs in the fields of information science,life science,energy science and nanoscience have followed.In order to adapt to the international situation and better meet the opportunities and challenges of the new era,China is also striving to achieve the transformation of economic growth mode and pursue the healthy and sustainable development of the economy driven by innovation.At the end of 2012,the 18 th CPC central committee put forward the innovation-driven development strategy for the first time,and the 13 th five-year plan further clarified the need to strengthen the leading role of enterprises in innovation activities.However,the innovation activity is a high investment and high risk activity,which requires a high level of enterprise resources,and the innovation achievement has the property of public goods,its externality will lead to the innovation market failure.In order to stimulate the enthusiasm of enterprises to carry out innovation activities,governments of all countries take corresponding measures to support enterprise innovation,and providing innovation subsidies is one of the most common ways.There is no unified conclusion on the effect of government innovation subsidy in the existing studies,and the mainstream views are as follows: One view is that the government innovation subsidy can share the enterprise risk,reduce the enterprise cost,increase the rate of return,and transmit the signal between enterprises and investors,so it will generate incentive effect and make enterprises increase the innovation input.The other view is that the government’s innovation subsidy will lead to the increase in the demand for innovation resources,which will lead to the increase in the price of resources and the increase in the innovation cost of enterprises.Moreover,the government subsidy may reduce the efforts of enterprises in innovation,which will have a inhibiting effect on the innovation input of enterprises.In addition to the incentive and crowding out effects,there is also a view that the government’s innovation subsidies have no clear effect,and different internal and external factors of enterprises will have an impact on the policy effect.Based on the existing research,this paper intends to explore the mechanism of government innovation subsidy on enterprise innovation input,and find out the regulating effect of subsidy scale on subsidy policy effect.Taking the innovation subsidies,innovation input and relevant financial data of 1211 Chinese listed companies from 2018 to 2012 as samples,this paper constructs a hybrid effect model to conduct an empirical study on the effect of government innovation subsidies,and analyzes the impact of subsidy scale on policy effect.The empirical results show that: 1.On the whole,the government’s innovation subsidy can promote the increase of enterprises’ innovation input,which is manifested as incentive effect.However,this incentive effect will change with the change of subsidy scale,that is,the innovation subsidy of the government has a moderate range.Before the subsidy scale reaches the optimal scale,the innovation subsidy has an incentive effect on the innovation input of enterprises,and the increase of subsidies will promote the increase of investment intensity of enterprises.However,after the optimal scale is exceeded,if the subsidy input is increased,the enterprise will reduce its investment in independent innovation,showing crowding out effect.2.According to the descriptive statistics on the sample data,the current innovation subsidy scale in China is far less than the critical point of effect transformation,which indicates that the current subsidy policy is still in the stage of strong incentive effect,and the subsidy intensity can be increased within the scope of fiscal permission.3.Considering the hysteresis of subsidy effect,this paper USES the data of the previous period of government subsidy to further analyze the investment of enterprises in the current period.The above conclusion is still valid after the hysteresis period is added,which ensures the robustness of the research results.According to the research results,this paper puts forward the corresponding policy Suggestions as follows: 1.Before the implementation of subsidies,the government should fully estimate the reasonable range and optimal value of subsidies,so as to give full play to the maximum effect of subsidies and avoid the waste of financial resources.2.When providing subsidies,it is necessary to pay attention to the relevant factors that may crowd out the subsidy policy beyond the subsidy scale,such as the moral hazard and adverse selection behavior of enterprises after the event.3.The guiding role of innovation subsidies should be given full play to guide the resource inflow of other idle capital enterprises,venture capital institutions and financial institutions,so as to alleviate the capital shortage of enterprises in innovation projects.Compared with previous studies,the innovation points of this paper are mainly reflected in the following two aspects: 1.It proposes to investigate the ultimate effect of subsidy policies from the perspective of subsidy scale,and to find the appropriate scope for providing subsidies.Through the research,it is pointed out that China’s innovation subsidy is still in the stage of strong incentive,and it can continue to increase the subsidy within the permitted level of finance,which enriches the research framework of this field.2.The micro data of Chinese listed companies were used to manually remove the data irrelevant to innovation activities in government subsidies to reduce research noise and ensure the reliability of research results.