Research On The Impact Of Government Subsidies And Debt Financing To SME's Innovation Inputs

Science and technology are the primary productive forces.Scientific and technological progress is the main driving force for social and economic development.As an important part of the science and technology progress,research and development(R&D)activities play an important role in improving the innovation ability of enterprises and countries.The amount of innovation inputs reflects the degree of enterprises and the state's emphasis on science and technology.The output of innovation not only reflects the level of science and technology development,but also indicates the future economic growth capacity of enterprises and countries.In recent years,with the development of the times,small and medium-sized enterprises(SMEs)have become an indispensable part of national economy.And it also gradually becomes the main force of innovation activities.Although R&D fund in China has been increasing in recent years,it still cannot meet the large need of enterprises' R&D activities.Adequate capital is the premise of R&D activities.Fund is important in every step of R&D projects.If there isn't enough R&D fund in certain step,the R&D activities will fail.If the R&D investment funds are insufficient,it will hinder the R&D investment and innovation.Therefore,it is necessary to analyze deeply how the government subsidies and the debt finance impact the innovation inputs in order to improve the means of obtaining financial support for innovation activities,improve the utilization efficiency of investment funds and motivate the output of innovation.The paper chooses the panel data of SMEs listed on the Shenzhen Stock Exchange from 2013 to 2016 as the research sample,empirically studying on the impact of government subsidies,debt financing and their interaction to the innovation inputs between science and technology SMEs(S&T SMEs)and traditional manufacturing SMEs.First,the paper elaborates the related concepts involved in the research,including SMEs,S&T SMEs,traditional manufacturing SMEs,government subsidies,debt financing and the innovation inputs.Then it introduces the theories involved in this paper,such as the pecking order theory,the market failure theory,asymmetry of information and the signaling theory.Then it creates a mathematical model to study how the government subsidies and debt financing affect innovation inputs.The model chooses government subsidies and debt financing as explanatory variables and innovation inputs as the explained variable.In order to eliminate the impact of other factors on the results of the study and strengthen the persuasion of independent variables,this paper chooses enterprise scale,profitability,net operating cash flow and the survival years of enterprises as the control variables.The main conclusions gained from empirical study as follows:Firstly,government subsidies have a significant impact on the innovation inputs of the SMEs,which even greater on the innovation inputs of the traditional manufacturing SMEs.Secondly,debt financing as the only explanatory variable in the model has no impact on the innovation inputs of the SMEs.Thirdly,when government subsidies and debt financing are multiplied as the third explanatory variable working in the regression,it works different effects on innovation inputs varying different types of SMEs.For S&T SMEs,debt financing magnifies the role of government subsidies in promoting SMEs' innovation inputs.And for the traditional manufacturing SMEs,when getting more financial loans,increasing government subsidies wouldn't make enterprises invest more in innovation.At the end of the paper,according to the above empirical results,this paper puts forward corresponding policy recommendations to SMEs,the government and financial institutions in order to improve the efficiency of the use of funds for innovative activities and innovation inputs of SMEs.So it will increase the innovation outputs and thus enhance the comprehensive national strength in our country eventually.