Government Subsidies, Corporate Strategic Differences And R&D Investment

With the increase of disposable income,people have a higher pursuit of health care.The accelerated aging process and frequent outbreaks of COVID-19 in recent years have further expanded the share of the pharmaceutical market.By the end of 2021,Domestic pharmaceutical market share has reached 1,633 billion yuan.Whether from the perspective of economy or livelihood,the development of pharmaceutical industry has attracted much more attention.In order to promote the restructuring and upgrading of pharmaceutical industry,Chinese government has also introduced a series of industrial policies to support,restrict and eliminate the development of subdivisions.Government subsidy is one of the important tools that industrial policy acts on micro enterprises.When analyzing the relationship between government subsidies and R&D investment of enterprises,most of the existing literatures only focus on the effect of government subsidies on micro-enterprises,ignoring the implied policy purpose of government subsidies.Based on the background of the introduction of industrial policies,this paper explores the relationship between government subsidies,strategic adjustment and R&D investment of pharmaceutical enterprises further.This paper takes China’s A-share listed pharmaceutical enterprises from 2008 to 2021 as the research object,and deeply discusses the relationship between government subsidies,enterprise strategy differences and R&D investment by integrating relevant theories and periodicals.It is found that the resource effect and certification effect brought by government subsidies promote the increase of enterprises’ R&D investment in pharmaceutical industry,and the enterprise strategy differences have intermediary effects in the relationship between government subsidies and R&D investment.This is because the supporting effect and backforcing effect brought by government subsidies under the guidance of industrial policies can induce enterprises to "seek government’s support",which inducing enterprises to invest in the supported fields,resulting the similarity in the direction of strategic adjustment,and the enterprise’s R&D activities are also guided by the enterprise strategy.What’s more,it is found that enterprises in the mature stage,with high degree of financing constraint and having light losses or insufficient profits could have enough motivation and ability to respond to industrial policies for strategic adjustment,which promoting the R&D investment in the supported fields,but the mediating effects of strategic differences are not significant for enterprises in the growth stage,with low degree of financing constraint and having serious loss or sufficient profit.In addition,pharmaceutical enterprises with a high quality of internal control and Longterm institutional investors holding more shares than short-term institutional investors could weaken the management opportunism by strengthening corporate governance and supervision mechanism,which ensures the rational use of subsidy resources.In this case,the mediating role of strategic differences in the relationship between government subsidies and R&D investment is more significant.The innovation points of this paper are as follows:Firstly,the difference of enterprise strategy is included in the analysis framework of government subsidies and R&D investment with the introduction of industrial policies,and it verifies a policy guidance path of government subsidy to promote enterprise R&D investment.Secondly,it explores the differentiated mechanism of enterprise strategy differences in the relationship between government subsidies and R&D investment from the perspective of enterprises’ abilities and motivation,and the perspective of corporate governance further,which enriches the relevant research on the government subsidies for pharmaceutical industry and corporate governance.