Technology Improvement,Government Subsidy,and Industry’s Technical Progress

For a long time,the high-tech industry has been subsidized by the government and the policy,which do enhance its technical level.So what is the role of government subsidies playing in its technology introduction and productivity improvement? As an important way to promote technological level,technology introduction has played an important role in the advancement of high-tech industries.So far,is it necessary for the government to continue to subsidize high-tech industries? Is it still necessary for the government to continue to subsidize all the high-tech industries? Thus,our empirical will focus on estimating the effect of government subsidies on the productivity of high-tech industry.Firstly we use OP model to analyze the technology import efficiency of high-tech industry,and then we estimate the productivity of high-tec industries,and we use productivity to represent efficiency of technology import.Finally we analyze the impact of government R&D subsidies on the productivity of high-tech industries through a two-way fixed effect productivity model.Our study finds that productivity in high-tech industries was on a rise,but its growth rate has gone through a marginal decline.Besides,government subsidies had a negative impact on the productivity of the whole industry,and among them,only aviation&spacecraft and equipment manufacturing can benefit from government subsidies.Last but not least,government subsidies have had strong negative effect on the industries’ productivity in the early time while now it has no impact.The reasons are as below: the higher the level of technology,the more difficult it is to overcome,so the input of the same proportion of factor output is reduced.In addition,with the low starting point in high-tech industry,the impact of government subsidies is even negative.As the government’s investment efficiency and technical level increase,the bad impact is decreasing.Therefore,it is suggested to make the investment process more transparent,shorten time lags,strengthen investment targeting,and improve the efficiency of government funds.