R&D subsidy can stimulate more private innovations, and it may also directly substitute and reduce R&D activities within firms, thus the policy risk arises. The key of successfully implementing R&D subsidy is reducing the policy risk. This paper proposes a coordinated theory framework to analyze how enterprises’own character (size) related hazard and market competition related hazard affect the performance of R&D subsidy. Using data of listed companies in China from 2008-2012 as a sample, this paper examines the moderating effects of enterprise size, market competition, and their combinations on R&D subsidy policies; besides, recognizing the terms, which can relieve the policy risk, attributes to the the improvement of R&D subsidy performance. The results indicate that government should avoid subsidizing large firms in low competitive industries and small firms in high competitive industries. Therefore, our study provides suggestions of making R&D subsidy policies reasonably in China.