| Economic development cannot be achieved without knowledge production and human capital accumulation,and technological innovation is becoming increasingly important in promoting the high-quality development of the national economy.The continuous progress of innovation and research and development provides a solid foundation for the steady progress of China’s economy.However,compared with developed countries,China’s science and technology development is still in a relatively backward situation,so as early as 2006,China put forward the development goal of "innovative country".Later,in the report of the 18 th Party Congress,the strategy of innovation-driven development was further clarified,indicating the way forward for the development of enterprises and society in China.Enterprises are the main force of our national innovation development,and sufficient investment in R&D is the source of power to ensure the normal development of innovation activities.However,even though the state has formulated many preferential policies to encourage enterprises to actively carry out innovation activities,Chinese enterprises still face the dilemma of insufficient investment in R&D and insufficient external financing.The reasons for this dilemma have not been studied in a uniform way.Therefore,it is particularly important to study the impact of government subsidies on firms’ innovation investment.An effective innovation support policy for enterprises is not only the physical funds brought by government subsidies,but also the inflow of other social funds and the opportunity to cooperate with high quality,high technology enterprises for innovation.Therefore,it is necessary to study the role of government subsidy signaling in guiding the investment decisions of external investors.This paper provides new ideas to optimize the government subsidy policy and improve the efficiency of government subsidy and enterprise innovation.In this paper,we analyze the impact of government subsidies on enterprise innovation investment in China from a less studied signaling perspective.The empirical analysis is conducted by using a two-way "time-year" fixed-effect model and a mediated-effect model for the period of 2012-2019 for A-share listed companies in China.Firstly,we systematically reviewed the literature on the direct impact of government subsidies on enterprises’ innovation investment,the impact of government subsidy signaling on different financing channels,the impact of external financing on enterprises’ innovation investment and the government subsidy signaling mechanism,which provided a solid theoretical foundation for the subsequent research.Next,five research hypotheses of this thesis are proposed:(1)Government subsidies have a signaling role and can promote firms’ innovation investment.(2)Relative to debt financing,government subsidies have a more pronounced signaling effect on external equity investors.(3)The process of government subsidies promoting firms’ innovation investment relies on the mediating effect of equity financing.(4)The signaling mechanism of government subsidies is more significant in regions with better institutional environment relative to regions with poorer institutional environment.(5)The signaling mechanism of government subsidies is insignificant for enterprises with different life cycles,only for those in the start-up stage.Then,the empirical analysis based on the sample data of listed companies has verified the proposed hypotheses,and the following conclusions are drawn.First,there is a positive relationship between government subsidies and enterprises’ innovation investment,and obtaining government subsidies will increase enterprises’ innovation investment.Second,the signaling effect of government subsidies will stimulate equity investors to invest more in enterprises and expand enterprise equity financing,but the signaling effect of government subsidies is not significant for external debt investors,and enterprise debt financing will not change because of obtaining government subsidies.Third,the signaling mechanism of government subsidies is realized through the intermediary effect of equity financing.In addition to directly promoting enterprise innovation investment,government subsidies can also indirectly promote enterprise innovation investment through promoting enterprise equity financing.Fourth,in regions with better institutional environment,government subsidies promote enterprise innovation input through signaling mechanism,i.e.,the mediating effect of equity financing holds.In the growth period,maturity period and decline period,government subsidies can play a signaling role in equity investors to increase the equity financing of enterprises and thus promote the innovation input funds of enterprises,but in the start-up period of enterprises,government subsidies cannot indirectly promote the innovation input of enterprises through equity financing,i.e.,the intermediary effect of equity financing does not hold,and government subsidies in this period can only promote the innovation input of enterprises through direct capital supplementation.The government subsidies in this period can only promote enterprises’ innovation investment through direct funding.Finally,through the theoretical and empirical analysis,the following specific suggestions and measures are proposed from the perspective of government and enterprises respectively to provide new ideas and policy guidelines for better promoting enterprise innovation investment.Government: First,increase the investment in enterprise innovation within a reasonable range.Second,focus on capital market construction and improve the market environment of equity financing.Third,optimize the government subsidy screening mechanism and follow-up supervision procedures.For enterprises: First,actively obtain government subsidies and timely adjust the corporate financing structure.Second,improve the internal information disclosure system and supervision system.Thirdly,accelerate the growth of enterprises and quickly pass the start-up period. |
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