Abstract:     There are many controversies about the actual effect of China′s new energy vehicle (NEV) industry policy on promoting the innovation of NEV enterprises. From a macro perspective, China has introduced a series of subsidized and nonsubsidized policies pertaining to the NEV industry during recent years. Although these policies have effectively promoted the rapid expansion of the NEV industry, the effectiveness of industrial policies on R&D and innovation incentives has always been controversial. On the micro level, it is quite common for some NEV enterprises to blindly pursue innovation quantity and ignore innovation quality to extract policy benefits. This practice of seeking quantity rather than quality is essentially a strategic low-quality innovation preference, which is contrary to the ‘initial heart’ of NEV industry policies, which is about promoting high-level R&D and innovation. Therefore, an in-depth analysis of the micro-mechanism underlying the impact of China′s NEV industry policies on innovation preferences is of great practical significance for further ensuring the precision of industry policies in terms of incentivizing innovation.In the process of studying the impacts of China′s NEV industry policies on innovation preferences, there are three issues that we should pay much more attention to. First, the subsidized and nonsubsidized policies pertaining to China′s NEVs are not identical, and their impacts on NEV enterprises are also different. Under the differing effects of these distinct types of industrial policies, enterprises will show varying innovation preferences. Some enterprises will focus on substantive innovation, while others may focus on strategic innovation. Second, the support of industrial policies currently comprises the main driving force of China′s NEV industry. Since the implementation of industrial policies usually manifests that government intervenes and dominates the allocation of some resources, enterprises tend to establish close ties with the organizations that control resources. Political connections have become the most common type of intimate relationship established between enterprises and governments in the context of industrial policy implementation. Therefore, there is bound to be a moderating impact of political connections on the relationship between subsidized and nonsubsidized policies and the innovation preferences of NEV enterprises. Third, China′s NEV industry has experienced multiple stages. During the different development stages of the NEV industry, the innovation foundation and resource endowment of enterprises are different; thus, the effects of subsidized and nonsubsidized policies on the innovation preferences of NEV enterprises are bound to be different.To address the above three questions, this study selects the Shanghai and Shenzhen A-shares of listed Chinese NEV manufacturing enterprises from 2010 to 2018 as research samples. We study and analyze the different impacts of subsidized and nonsubsidized policies on the substantive and strategic innovation preferences of these NEV enterprises. During analysis, we also take the moderating impact of political connections and the different development stages of China′s NEV industry into account. The results demonstrated that, first, NEV industrial policies have an overall effect on the promotion of enterprises′ innovation preferences; however, different types of industrial policies affect enterprises′ preferences regarding substantial or strategic innovation differently at varying development stages. Industrial policies still do not sufficiently stimulate enterprises′ high-level innovation. Specifically, subsidized policies pertaining to the NEV industry more effectively promote the overall innovation of enterprises, but they are also more likely to cause enterprises to prefer strategic innovation. Although nonsubsidized policies have a relatively small promoting effect on the overall innovation of enterprises, they can more effectively stimulate enterprises to prefer substantive innovation. During the development of the NEV industry, the impact of the subsidized policies increased at first and then decreased. In addition, these policies have had a greater impact on strategic innovation. The impact of nonsubsidized policies gradually increased over this time period, and these policies have had a greater impact on enterprise′ preferences for substantive innovation.Second, the innovation behavior of NEV enterprises is inseparable from their political connections. The political connections of NEV enterprises have a moderating effect on the relationship between industrial policies and innovation preferences, but this moderating effect of political connections is not identical for each of the impacts of the different types of industrial policies on enterprises′ different innovation preferences. Overall, political connections have a positive moderating effect on the influence mechanism of subsidized policies and a negative moderating effect on the influence mechanism of nonsubsidized policies. In terms of the specific innovation preferences of enterprises, political connections have a positive moderating effect on the relationship between subsidized policies and the strategic innovation of NEV enterprises, and a negative moderating effect on the relationship between nonsubsidized policies and the substantive innovation of NEV enterprises.Therefore, in order to promote the substantive innovation of NEV industry policies, it is necessary to change the current ‘one size fits all’ administrative arrangement model of subsidized policies. Meanwhile, the content of non-subsidized policy should be further enriched and the implementation of non-subsidized policy should be strengthened. In addition, it is also a necessity to grasp the moderating effect of enterprises′ political connections in promoting high-level innovation of NEV industrial policies. This paper enriched the analytical framework of nonsubsidized policies and enterprise innovation incentives, and provided empirical evidence for optimizing NEV industry policies and better encouraging enterprises to substantive innovation.

Key words: new energy vehicle (NEV), subsidized policy, non-subsidized policy, innovation preference, political connections