Research On The Effect Of Heterogeneous Industrial Policy On Technological Innovation Of China’s Metal New Material Enterprises

In recent years,technological innovation in China’s metal new material industry has been upgraded to the level of national strategic decision-making.Metal new materials are indispensable for the development of strategic emerging industries,which are matters of optimizing the industrial structure and marching up the global value chain.Due to the sector’s unique characteristics,the innovation activity is characterized by high-risk factors,such as the need for high initial investment in R&D and prolonged innovation cycles.Successful promotion of technological innovation in China’s metal new material industry requires joint action between the government and market actors.Motivated by this,the study aims to clarify the effectiveness of industrial policy on technological innovation in China’s metal new material industry.This paper aims to explore the effect of heterogeneous industrial policy on the technological innovation of enterprises in China’s metal new material industry based on system Generalized Method of Moment(GMM)model.This study analyzes the effects of single policy instruments,specifically government subsidies,tax credits,and loan support,and closely examines the combined effects of different types of industrial policies.We consider a panel data set that includes 93 listed enterprises from the 2008 to 2018 period.The findings lead to the following conclusions: First,single industrial policy instruments at the fiscal or monetary level help to promote technological innovation in China’s metal new material industry.And the tax credit policy is more effective and efficient compared with the other two policy instruments.Second,all three industrial policy instruments display an inverted U-shaped relationship with technological innovation,indicating that excessive policy support inhibits corporate innovation.Third,there is no “policy mess” problem and the policy mixes of two or three different instruments can achieve an overall coherence and coordination.Based on these conclusions,relevant industrial policies should continue to be implemented in moderation,especially tax credits,and a long-term supervision system should be established.Additionally,the government should actively explore multiple policy combinations with integrate resources and complementary advantages to give full play to the function of industrial policies and compensate for market failures caused by positive externalities of technological innovation.