Abstract: Specialized and sophisticated “Little Giants”enterprises are an important force in the national innovation-driven development strategy, but the existing micro research on the innovation effect of the recognition policy of specialized and sophisticated “Little Giants”enterprises is not deep enough. For this reason, this paper takes the small and medium-sized companies listed in 2015-2021 and the national specialized and sophisticated “Little Giants”enterprises recognized during this period as the research samples, and adopts the double-difference method to examine the impact of the recognition policy on the innovation quality and innovation efficiency of enterprises and the influence mechanism. It is found that the policy of recognizing specialized and sophisticated “Little Giants”enterprises can significantly improve the innovation quality and innovation efficiency of enterprises, and this conclusion still holds after a series of robustness tests. It is further found that the recognition policy improves firms' innovation quality and efficiency mainly through alleviating financing constraints, improving human capital acquisition and facilitating digital transformation. At the same time, the effect of the recognition policy on innovation quality and efficiency is more significant in the second batch of selected enterprises, enterprises applying the financial subsidy support means, and enterprises in the maturity and decline periods. This paper provides intuitive and powerful evidence for the effectiveness of the policy of recognizing specialized and sophisticated “Little Giants”enterprises , which has important theoretical and practical value for better assisting the cultivation of specialized and sophisticated “Little Giants”enterprises.

Key words: specialized and sophisticated “Little Giants”enterprises, innovation quality,, innovation efficiency, digital transformation