Research on the Effect of Government Subsidies on R&D Investment of Strategic Emerging Industries

Science Research Management ›› 2016, Vol. 37 ›› Issue (5): 19-23.

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Research on the Effect of Government Subsidies on R&D Investment of Strategic Emerging Industries

Wu Xianyun^1,2, Chenyan ¹, Yang Weihua ²

1. School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, Liaoning, China；
2. School of Management, Dalian Polytechnic University, Dalian 116034, Liaoning, China

Received:2015-04-21 Revised:2015-09-28 Online:2016-05-20 Published:2016-05-06

Abstract

Abstract: Government subsidies are the main means of stimulating corporate innovation.. With the sample of 278 firms of strategic emerging industries from 2010 to 2013, this paper applied the fixed panel data model to study the effect of government subsidies on R&D investment. The empirical results show that: First, government subsidies have a critical point, when the subsidy is lower than the point, it will induce more R&D investment, otherwise, the subsidy will have a crowding-out effect on companies’ R&D investments. Second, firm’s rent-seeking behavior can improve the leverage effect of government subsidies. However, rent-seeking behavior is not a productive activity, thus obtaining subsidies through rent-seeking will distort the government subsidy policy, which is aimed at promoting R&D innovation.

Key words: strategic emerging industries, government subsidies, R&D investments, leverage effect, crowding-out effect

Wu Xianyun, Chenyan, Yang Weihua. Research on the Effect of Government Subsidies on R&D Investment of Strategic Emerging Industries[J]. Science Research Management, 2016, 37(5): 19-23.

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Research on the Effect of Government Subsidies on R&D Investment of Strategic Emerging Industries

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