The Impact Of Government Subsidies On The Innovation Capability Of Digital Economy Firms

Since the 18 th National Congress,the Party and the State have attached great importance to the development of the digital economy,and General Secretary Xi Jinping has repeatedly emphasized at important meetings the need to promote the healthy development of the digital economy and to continuously make China’s digital economy bigger and stronger.The development of digital economy has become a national strategy.National,provincial and municipal policies,plans and incentives have been introduced one after another to support the development of digital economy,among which policies supporting the area of subsidies are more involved.Government subsidies for enterprises to carry out innovation activities can effectively compensate and correct the impact of market failure on the economy.At the same time,government subsidies can reduce innovation input costs and innovation risks for enterprises,which is beneficial for digital economy enterprises to carry out innovation activities and enhance their innovation capabilities.Based on this,it is important to explore the impact of government subsidies on the innovation ability of digital economy enterprises.This paper selects data of digital economy core industry enterprises in Chinese Ashare listed companies from 2011-2021,and empirically tests the impact of government subsidies on the innovation capability of digital economy enterprises by constructing a double fixed effects model;analyzes the impact of government subsidies on the innovation capability of enterprises in different life cycles,and conducts robustness tests on the empirical results.Through further heterogeneity analysis,we explore the heterogeneous effects of government subsidies on the innovation capability of enterprises with different ownership nature and different sizes.The results show that government subsidies can significantly enhance the innovation capability of digital economy enterprises,and there is some heterogeneity in the effects on enterprises with different life cycles.Government subsidies have the greatest effect on the innovation ability of growth stage enterprises,the second largest effect on the innovation ability of mature digital economy enterprises,and the insignificant effect on the innovation ability of declining stage enterprises;government subsidies have a more significant effect on the innovation ability of non-state enterprises compared with state-owned enterprises;government subsidies have a more significant effect on the innovation ability of small-scale enterprises compared with large-scale enterprises.Therefore,the government should develop differentiated subsidy policies and innovation incentives according to the different nature of enterprises,and actively guide digital economy enterprises to improve the quality of innovation.