An Empirical Study On The Effect Of Fiscal Technology Expenditure On Enterprise Innovation From The Perspective Of Government Innovation Preference

For years,under the Chinese fiscal decentralization system and the "promotion competition" of local officials,economic growth has long been regarded as the primary goal of local governments.Recently,as "innovation-driven development strategy" and the advancement of sci-tech system reform come up,science and technology innovation is being a new target of local government preference.Guided by the central top-level design,local governments begin to value the construction of regional innovation system and the incentives for enterprise innovation,which is intuitively reflected in the increase in fiscal technology expenditure.However,the actual effect of the fiscal technology expenditure in stimulating enterprise innovation is doubtful.Meanwhile,in the process of China’s market-oriented sci-tech system reform,it is also worth considering whether different levels of economic agglomeration and marketization in different regions would affect the realization of local government innovation goals.Based on this,this paper selects the data of listed companies in China from 2008 to2019 and the data at their regional level to analyze the impact mechanism of fiscal technology expenditure on enterprise innovation from the perspective of government innovation preference.First,this paper sorts out and summarizes the domestic and foreign relevant literature on government innovation preference,fiscal technology expenditure and enterprise innovation.Secondly,this paper defines the above three concepts,and introduces the theory of public goods,endogenous growth theory and innovation ecosystem theory to construct a theoretical framework.Next,this paper shows the current situation of fiscal technology expenditure and enterprise innovation.Then,combined with the theoretical basis and characteristic facts,this paper analyzes the impact mechanism of fiscal technology expenditure on enterprise innovation,and the moderating mechanism of economic agglomeration and marketization level to put forward research assumptions.Finally,this paper constructs the benchmark equation and uses the two-way fixed effect model to test and estimate both mechanisms.The study finds that,firstly,the increase in fiscal technology expenditure by local government innovation preference will act like a leverage to grow up the enterprises investment in research,boost their willingness to invest and improve their output of innovation.Second,the agglomeration of local economic activities weakens this leverage effect.To explain,on the one hand,the concentration of economic activities has formed a more intensive factor market,and the matching degree of resource factors in the region has been improved too,thus weakening the role of the government in alleviating the mismatch of resources.On the other hand,economic agglomeration has promoted the scale economy and competitive environment within the region,forcing enterprises to actively carry out research and development activities for surviving through the competition,and weakening the incentive function of fiscal support.Third,as marketization level grows,the role of "effective market" is gradually enlarged.Enterprises begin to take the market demand as the guidance,allocate resources effectively for research and development of new products,and the effectiveness of fiscal technology expenditure on enterprise innovation is weakened.Fourthly,the effect of the fiscal support for innovation activities exists heterogeneous in different regions,among which the western region with low level of economic agglomeration and marketization is the most outstanding,central region the second,an eastern region the last.This conclusion further supports the above empirical results of the impact effect.According to the conclusions,this paper gives three suggestions from the perspective of properly balancing the relationship between "promising government" and "effective market".First,strengthening the government’s "steady" signal in supporting enterprise innovation and maintain a stable growth rate of fiscal allocations for sci-tech to enhance the local government’s innovation preference level are crucial to stabilize enterprise expectations and reduce their short-term behavior;Second,governments should clarify the their responsibility of "supplement" in supporting the innovation of enterprises,and make up for the shortage of enterprises’ investment scale and fields of innovation activities based on local conditions combined with the differences in the degree of economic agglomeration and the level of marketization in different regions;Third,local governments should also specify the timing of "retreat" in supporting enterprise innovation,grasp the main tone of the "allocation" to "coordination" of the fiscal role,and timely withdraw from research and development areas where the market mechanism can perform.