Abstract:

   As the world enters a new state characterized by science and technology competition, China needs to get rid of the dilemma that some core technological products are controlled by other countries as soon as possible. How to break through the technological blockade of developed countries and learn the production skills of the core products is the top priority for China to enhance overall national strength and boost international competitiveness. The similarity between the core products and highly complex products in the product space theory opens up a new research perspective. 

   In the product space theory, products come from a combination of non-tradable and irreplaceable production capabilities in the economic system. The essence of China′s "neck-jamming" problem on key core components is the lack of those key core production capabilities, with which developed countries are normally endowed. The monopoly of products is actually the monopoly of production capabilities. It is very important for China to accelerate the accumulation of production capabilities, improve the similarity between existing capabilities and key core capabilities, and complete the migration and diffusion of capabilities to break away from the "neck-jamming" dilemma. 

    As the core driving force of economic growth, innovation is also a key factor for companies to enhance their competitiveness and increase export complexity. Although developing countries can gain late-comer advantages by introducing or imitating advanced technologies from developed countries and narrowing the economic development gap with developed countries, as for pursuit of high-quality economic development, the traditional imitating innovation model has strategic deficiencies at the institutional and mechanism level and it is unable to gather limited ability endowment resources to promote industrial overall innovation and systemic innovation.

     From the perspective of enterprise innovation performance and government-funded resource input. This paper firstly empirically analyzes the impact of public subsidies on the innovation models selection, distinguishes the subsides effects on independent innovation models and imitative innovation models based on industry heterogeneity. We recognize the independent innovation models and imitative innovation models by comparing the import products quality and innovation products quality, and use two dummy variables to present tow innovation models as the dependent variables. We use the government′s direct subsidies as independent variables. Other influencing factors are used as control variables.

      Based on the research results obtained with the Probit model, we find that public subsidies have significantly positive effect on both independent innovation models and imitative innovation models, and generally speaking, the incentive effect for imitative innovation models is greater than the incentive for independent innovation models. As the industry′s technology intensity increases, the difference between the two incentive effects gradually widens.

      Furthermore, we establish empirical models in which the enterprise export complexity is used as dependent variables. At the same time, we include the interact term between public subsidies and innovation models to test whether government subsidies affect export complexity by influencing the innovation models selection. 

      The regression results show that subsidies can increase the export complexity by stimulating independent innovation and imitating innovation. For the technology-intensive machinery and electronics industry, government subsidies normally increase the export complexity by stimulating imitating innovation.

      Based on the large sample database of 2000-2007, we assess the impact of subsides on innovation models section and export complexity. The conclusions affirm the positive role of government subsidies in promoting technological upgrading and structural transformation, discover the dilemma of enterprises in innovative model selection to increase the export complexity, and deepen the understanding of the basic laws of subsidies to promote innovation and export complexity. It is of enlightening significance to help China get rid of the dilemma of "neck-jamming" problem as soon as possible and to clarify the direction of further adjustment of China′s industrial policy.

Key words: government subsidy, enterprise export complexity, independent innovation, imitative innovation