The Influence Of Government Innovation Subsidy On Bond Issuance Spreads

In recent years,China’s economy has gradually shifted from high-speed growth to high-quality growth.It has entered a crucial stage of shifting from old drivers of growth to new ones and accelerating industrial transformation and upgrading.The transformation,upgrading and high-quality development of economy cannot be separated from the innovation of underlying technology.As the micro-subject of China’s economy,enterprises are the core and important fulcrum of the country’s implementation of innovation-driven development strategy.Although innovation can enable enterprises to maintain core competitiveness,promote industrial upgrading and technological evolution,and provide source power for economic development.However,for micro enterprises,innovation is not easy.For enterprises themselves,the long-term periodicity requires continuous and large amount of capital input for innovation activities.For external investors,privacy and difficulty in evaluating innovation value increase the information asymmetry between external investors and innovative enterprises,and inhibit external investment in innovation.At this point,the government needs to give a "invisible hand" selected high quality innovation,with government subsidies and other measures to guide,to convey to the capital market actively"certification" of information,alleviate the information asymmetry,help enterprises to attract social capital and reduce financing costs,improve enterprise’s willingness and ability of innovation,promote overall social welfare level of ascension.Taking 770 corporate bonds issued by Chinese listed companies from 2011 to 2020 as research objects,this paper empirically examines the impact of government innovation subsidies on bond issuance spreads,and explores the moderating effects of R&D investment,property rights of enterprises,location of enterprises and audit quality.The robustness of the empirical results was tested by replacing explanatory variables,changing sample period and instrumental variables,in order to provide theoretical guidance for policy formulation and implementation and enrich the theoretical results in this area.The conclusions of this paper are as follows:First,bond issuance spreads will decrease with the increase of government innovation subsidies,which indicates that the failure of bond market can be corrected by government innovation subsidies,and send positive signals and direct support for enterprise innovation projects,thus encouraging enterprises to innovate and enhancing enterprise value.Second,as the information asymmetry and risk of enterprises with high R&D investment are greater,external investors pay more attention to "certification" information,so the government innovation subsidy plays a more significant role in enterprises with high R&D investment,while the government innovation subsidy does not play a significant role in enterprises with low R&D investment.Thirdly,the effect of government innovation subsidy on the spread of corporate bond issuance varies with the nature of corporate property rights,location and audit quality.This paper finds that government innovation subsidies have a more significant effect on reducing bond spreads in non-state-owned enterprises,central and western regions and enterprises with higher audit quality.Finally,according to the research results,this paper puts forward some suggestions for the government to play the role of policy guidance and optimize the allocation of social resources.Improve the subsidy screening mechanism to ensure that the signal is true and effective;Suggestions on improving the flexibility of government subsidies,improving the handling mechanism of bond default,formulating reasonable innovation strategies for enterprises,and improving the information disclosure system;The suggestion of optimizing the governance structure and improving the efficiency of capital utilization endows this paper with practical significance.