Research On The Innovation Incentive Of Financial Subsidies To SMEs

In the outline of the 14 th five-year Plan for National Economic and Social Development of the People’s Republic of China and the outline of long-term goals for 2035,it is clearly stated that "innovation should be placed at the core of the overall modernization drive,and innovation is the first leading force to develop".In general,in China,SMEs have a typical "56789" feature,In other words,SMEs account for around 90% of the total number of enterprises in China,provide more than 80% of jobs,generate more than 70% of business technological innovation,around 60% of GDP and more than 50% of government tax revenues.So they are the main force in promoting economic development and social stability.Secondly,in terms of scientific introducing things,SMEs are more flexible and can more sensitively capture innovation opportunities in the market.Finally,the industrial chain of manufacturing industry is relatively long,and the division of labor among upstream,midstream and downstream is more detailed.In this process,large enterprises may give up these links with high added value but low market share for the sake of the overall interests of enterprises,but this link is just suitable for the development layout of SMEs.GEM-listed companies are mainly small and medium-sized enterprises with a high level of innovation,which is crucial to achieving the goal of becoming a powerful manufacturing country.For enterprises themselves,innovative activities are the key force to support its long-term development.However,innovation activities are faced with the uncertainty of failure,and innovation achievements have certain positive externalities.It is because the marginal income of enterprises is less than the social income.Therefore,rational enterprises have insufficient investment in innovation.At this time,the government needs to rely on public power to guide enterprise innovation.A financial subsidy is a common way for governments to intervene in the economy.Through direct financial support,it can affect the innovation activities of enterprises,alleviate the pressure of insufficient innovation funds of SMEs,and explore the impact of financial subsidies on innovation activities of SMEs has a certain current significance..The structure is as follows.: The first part introduces the background to the study of this paper from the perspectives of the new requirements of domestic and international situations for innovation,the role of enterprises in innovation,and the role of SMEs in innovation,and accordingly puts forward the possible research significance of this paper in theory and practice;Secondly,from the two dimensions of the impact of financial subsidies on enterprise innovation input and the impact of financial subsidies on enterprise innovation output,study the research directions and research methods of previous scholars.This informs the content and research methods of this thesis,as well as possible innovations and shortcomings..The second part explains the connotation of relevant concepts from various angles,And the concepts of financial subsidy,small and medium-sized enterprises and technological innovation are determined as the main research objects of this paper.Further more,it lays a theoretical foundation for this paper from the innovation theory,externality and market failure theory,information asymmetry and signaling theory,Based on the theory,this paper analyses the mechanism of the influence of financial subsidies on enterprise innovation in more detail..Lay the foundation for the following.The third part is the current situation of China’s financial subsidies and SME innovation.Through the analysis of the current situation,it is proposed that there may be overlapping and insufficient subsidies for financial innovation.The structure of innovation investment is unreasonable,and enterprises’ innovation quality to be improved.The fourth part takes the small and medium-sized enterprises of gem as the research object.,conducts an empirical analysis of the innovation incentive effect of financial subsidies,demonstrates the impact of financial subsidies on their innovation input and output.Innovation intensity of firms as an agent variable of innovation investment of firms,and take the number of patent applications as the proxy variable of enterprise innovation output.A two-way fixed effect model of panel data is established to analyze the impact of financial subsidies on enterprises’ technological innovation input and the impact of financial subsidies on enterprises’ technological innovation output.The fifth part is the conclusion of this paper,which puts forward the corresponding suggestions from the aspects of perfecting laws and regulations,appropriately increase financial support,and adjust the structure of financial subsidies.