Political Connections?Government Subsidy Andtechnological Innovation

Under the special background of China's economic transformation,upgrading the level of technological innovation has become an important strategic policy of the country.As an important part of market economy,private enterprises have become the backbone of scientific and technological innovation.However,compared with the state-owned enterprises,private enterprises are always at the bottom of the allocation of resources,the growth and development of the system is bound to a large extent.In this case,the private enterprise will try to establish the political connection as an alternative mechanism of the institutional environment,in order to get through this approach is conducive to the survival and development of political resources.But the political connection is a double-edged sword,it brings some key resources to the enterprise,but also increase the political burden of enterprises,hinder the development of enterprises.In exploring the relationship between political connection and enterprise technological innovation,we introduce the government subsidy as a variable to help better explain the impact of political connections on technological innovation.This paper examines the A shares of private listed companies in 2013-2015 and access to government subsidies for technological innovation,in-depth study of private enterprise political connection and its influence on the role of technological innovation,and from the dynamic point analysis of the intermediary mechanism of government grants.At the same time,this paper explores the influence of regional differences on the relationship between political connections and government subsidies,and the micro mechanism of government subsidies to enterprises'technological innovation.The results showed that both play a significant role in promoting political association of enterprises to obtain government subsidies and technological innovation activities,and government subsidies have mediating effect between political connection and technological innovation,the positive influence of political association on technology innovation part is realized through government subsidies.Furthermore,the degree of government intervention and the degree of local fiscal affluence have a positive regulatory effect on the relationship between political connections and government subsidies.Finally,compared with the high level of cash holding enterprises,government subsidies incentive effects on technological innovation of enterprises in the low level of cash holdings is more obvious in the enterprise;also,with low financing constrained firms,government subsidies incentive effects on technological innovation of enterprises is more obvious in the face of high financing constraints in enterprises.Above all,the government should focus on promoting the process of market-oriented areas to ensure the efficiency of policy implementation,to achieve the optimal allocation of subsidized resources.And the government should also reduce the threshold of innovation incentives for enterprises,and actively promote the independent innovation capability of private enterprises.