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| Can Government Subsidy Improve High-tech Firms’ Independent Innovation? Evidence from Zhongguancun Firm Panel Data |
| ZHANG Yuan, CHENG Yu, SHE Guoman
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China Center for Economic Studies, Fudan University;
Research Department of Rural Economy, Development Research Center of the State Council;
Business School, Hong Kong University of Science and Technology |
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Abstract Chinese government invested a huge number of subside onto high-tech firms in order to boost the innovation level of them.However, present literature does not arrive at the same conclusion.Using a panel of about 30,000 high-tech firms in Zhongguancun from 2001 to 2012, this paper adopts Propensity Score Matching and Difference in Difference to re-evaluate the effect of government subsidy on innovation, and arrive at the following conclusions: first, generally speaking, government subsidy significantly improves high-tech firms’ innovation expenditures, new products sales and application for patents; second, government subsidy has spill-over effect - it improves the purchased new technology at expense of significant reduction of independent innovation; third, government subsidy has significant effect on improving high-tech firms’ short-term innovation, but no significant effect on long-term innovation; These conclusions shed light on the adjustment of government policies to optimize the effect of subsidy on firm innovation.
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Received: 30 August 2017
Published: 16 November 2018
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