Local Government Subsidies And Enterprise Digital Transformation

As an important policy way for the government to carry out scientific and technological innovation to microeconomic subjects,the financial subsidies of local governments also play an important role in the digital transformation of enterprises in the new era.In recent years,with the national emphasis on the digital transformation of enterprises,not only the digital economy development policies have been introduced,but also local governments continue to strengthen the strategic guidance for local digital development.The development of digital economy provides new opportunities and new changes for enterprises,and also has a profound impact on the internal and external environment of enterprises.However,due to the lack of basic technical means caused by "will not transform",excessive investment caused by "cannot transform",and long-term transition pain caused by "dare not transform",and the externality of digital economy determines that the quality of technology to support the development of digital economy is not high.Therefore,in the long-term development of digital transformation,the "visible hand" of the government is essential.However,there is a paradoxical phenomenon in the existing studies,that is,some studies suggest that government subsidies can effectively reduce the cost of digital transformation and promote the acceleration of innovation.Other scholars pointed out that in order to win national support for enterprises’ digital transformation,companies usually adopt a "pandering" approach,which leads to the dislocation of the company’s normal operation and innovation track.Based on this,this thesis will take local government subsidies as the entry point,investigate the effect of local government subsidies on the digital transformation of listed companies,and give corresponding policy suggestions according to the empirical test results.In the literature review part,this thesis sorted out relevant researches at home and abroad and divided them into five modules: the definition of enterprise digital transformation,the connotation and current situation of enterprise digital transformation,the measurement of enterprise digital transformation,the economic and social effect of enterprise digital transformation and the driving factors of enterprise digital transformation,and analyzed the relevant research gaps and made literature review.It is found that few literatures evaluate the government-driven effect of enterprise digital transformation from the perspective of government subsidies.The heterogeneity analysis did not distinguish between R&D subsidies and non-R&D subsidies,resulting in mixed results.In the part of theoretical basis and research hypothesis,the theoretical sources are resource based theory and signal transmission theory.As the new generation of information technology is revolutionizing the source of competitive advantage and the way of value creation of enterprises,enterprises need to constantly build new enterprise capabilities in order to obtain long-term competitive advantage.In essence,the support of government subsidies is to help enterprises win more capital inflow and technology inflow from the outside world through the positive investment signals released to the market,so as to improve the level of technological innovation of enterprises.This thesis makes the following five research hypotheses.Local government subsidies play a significant role in promoting enterprises’ digital transformation.Local government subsidies promote and enhance enterprises’ digital transformation by easing financing constraints,entering enterprises’ digital human capital input,and improving the input-output level of R&D innovation.The impact is heterogeneous among different types of government subsidies,different business ownership,different industries,and different regions.In the empirical test,the thesis discusses the influence of local government financial assistance on the digitization degree of enterprise development.By collecting macroeconomic information of A-share listed companies in Shanghai and Shenzhen during 2007-2020,we empirically investigated the effect of local government subsidies on enterprises’ digital development,and obtained some important research results as follows: First,regional government subsidies significantly promoted enterprises’ digital transformation;second,Local government subsidies boost enterprises’ digital transformation by easing financing constraints,entering human capital input and improving the input-output level of R&D innovation.Third,both government R&D subsidies and non-R&D subsidies can effectively promote enterprises’ digital transformation,and the effect of R&D subsidies is slightly smaller than that of non-R&D subsidies.For non-state-owned and high-tech enterprises,the driving effect of local government subsidies is more prominent.Local government subsidies in the eastern region have a better driving effect,while the driving effect of digital transformation in the central and western regions is not obvious.In the policy suggestions,based on the above empirical conclusions,if the driving force of enterprise digital transformation driven by local government subsidies is to be improved,the endowment characteristics of enterprises,regional levels and subsidy types should be comprehensively considered.The government should introduce more subsidy policies suitable for enterprise digital transformation,increase the intensity of subsidies,and implement differentiated local government subsidy policies.To classify it,give precise policies,and formulate a matching incentive mechanism.Enterprise managers should improve their ability to coordinate and manage resources,improve their response ability to digital impact and digital adaptability.