The Mechanism of Government Subsidies on Enterprise R&D Investment from the Perspective of Heterogeneity

Enterprises have the problem of insufficient R&D motivation due to the positive externalities and high risks of R&D activities. In order to promote the improvement of national innovation support capabilities, the government tries to use fiscal policies to encourage enterprise R&D. In this context, whether government R&D subsidies bring enterprises R&D dynamics are worthy of further study. This paper uses the data of my country's A-share listed companies from 2009 to 2018 and uses the two-stage least squares method to estimate the mechanism of government subsidy policies on corporate R&D investment. The study finds that government R&D subsidies do have a positive incentive effect on corporate R&D investment, and this incentive effect is notably established in enterprises, state-owned enterprises, and enterprises in intellectual property-intensive industries that are in the growth, maturity, and decline periods. This article provides a theoretical basis for the government to implement fiscal subsidy policies and promote enterprise R&D.