Study On The Mechanism And Efficiency Of Government Subsidy Promoting R&D Output Of IOT Industry

The IOT industry is developing rapidly in recent years. Our government pays much intention to it as a large amount of subsidy is put into it. Most of the subsidy is used for boosting the R&D activities. There are many scholars who study the relationship between government subsidy and R&D activities of companies. However, they haven’t come up with a final conclusion. In addition, the studies are mostly about the direct connection between the two variables. There are very few scholars who study the mechanism and efficiency between government subsidy and R&D activities. However, the understanding of them is very crucial in investment decision-making. Therefore, the study of mechanism and efficiency between the two variables is of great importance.At first, we review the theory of IOT industry, subsidy and R&D activities. It summarizes and comments the studies about the relationship between the government subsidy and companies’ R&D activities, as well as the studies about how to measure mechanism and efficiency. Then it comes to the empirical part. It is divided into two parts, the mechanism study part and the efficiency study part. By using panel data model and mediating effect analysis, the mechanism part tries to evaluate whether R&D input plays an intermediary role in the process of subsidy affecting R&D output. For the efficiency part, through the use of DEA BCC model and Malmquist productivity index model, combined with an interview of a company, we try to find the efficiency of the process and the reasons.Through empirical research, we get the following conclusions. From the perspective of mechanism study, the government subsidy has a significant positive stimulus on corporate R&D output and R&D input, and the corporate R&D input plays a significant intermediary role. However, the efficiency of government subsidy affecting corporate R&D output is low. From the perspective of efficiency study, the comprehensive technical efficiency of 2012 and 2013 is low, and the main reason is corporate scale inefficiency. During the 5 years from 2009 to 2013, the government subsidy’s TFP is declined, mainly due to the decline of Techch. The Pech and Sech remain stable.Based on the conclusion, we come up with the following advices. From the government’s perspective, in order to promote the development of IOT corporate R&D output, they should use subsidy more than tax to fund IOT companies. For the low efficiency of government subsidy supporting corporate R&D output, we should do more in-depth analysis. In order to improve the efficiency of subsidy, governments should strengthen the subsidized company management and assessment, focus on communication with companies to understand their needs, develop different subsidy schemes according to different business situations, and make appropriate adjustments to the subsidies. From the companies’ perspective, they should be aware of the important role that R&D input plays in the process of government subsidy supporting corporate R&D output. They should find problems from the mechanism and try to improve them. In addition, companies should also improve the capability to use R&D activities management techniques, and optimize the management techniques in time. But, they should be careful not to blindly expand the scale of companies.