TY - JOUR
T1 - Do government subsidies improve innovation investment for new energy firms
T2 - A quasi-natural experiment of China's listed companies
AU - Wu, Zhanchi
AU - Fan, Xiangjun
AU - Zhu, Bangzhu
AU - Xia, Jiahui
AU - Zhang, Lin
AU - Wang, Ping
PY - 2022/2
Y1 - 2022/2
N2 - This paper applies the fixed effects and the difference-in-differences models to explore the impact of government subsidies on the innovation investment of new energy firms by the financial information of China's listed companies from 2007 to 2017. The empirical results demonstrate that the subsidy scale of new energy enterprises has an inverted U-shaped relationship with enterprise innovation investment. The higher subsidy level has a crowding out effect on the research and development (R&D) investment of enterprises, which is largely attributable to the managerial myopia of enterprises. We further confirm the existence of the crowding out effect by exploring the quasi-natural experiment of China's new energy vehicle subsidy adjustment policy in 2016. We find that reducing subsidies is associated with a significant increase in R&D investment. This study reveals the optimal choice of government intervention.
AB - This paper applies the fixed effects and the difference-in-differences models to explore the impact of government subsidies on the innovation investment of new energy firms by the financial information of China's listed companies from 2007 to 2017. The empirical results demonstrate that the subsidy scale of new energy enterprises has an inverted U-shaped relationship with enterprise innovation investment. The higher subsidy level has a crowding out effect on the research and development (R&D) investment of enterprises, which is largely attributable to the managerial myopia of enterprises. We further confirm the existence of the crowding out effect by exploring the quasi-natural experiment of China's new energy vehicle subsidy adjustment policy in 2016. We find that reducing subsidies is associated with a significant increase in R&D investment. This study reveals the optimal choice of government intervention.
KW - Equity pledge
KW - Innovation investment
KW - Managerial myopia
KW - New energy
KW - Subsidy
UR - http://www.scopus.com/inward/record.url?scp=85120903941&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-85120903941&origin=recordpage
U2 - 10.1016/j.techfore.2021.121418
DO - 10.1016/j.techfore.2021.121418
M3 - RGC 21 - Publication in refereed journal
SN - 0040-1625
VL - 175
JO - Technological Forecasting and Social Change
JF - Technological Forecasting and Social Change
M1 - 121418
ER -
