Han, Feng; Mao, Xin; Yu, Xinyu; Yang, Ligao
A icle
Go e nmen en i onmen al p o ec ion subsidies and
co po a e g een inno a ion: E idence om Chinese
mic oen e p ises
Jou nal o Inno a ion & Knowledge (JIK)
P o ided in Coope a ion wi h:
Else ie
Sugges ed Ci a ion: Han, Feng; Mao, Xin; Yu, Xinyu; Yang, Ligao (2024) : Go e nmen en i onmen al
p o ec ion subsidies and co po a e g een inno a ion: E idence om Chinese mic oen e p ises,
Jou nal o Inno a ion & Knowledge (JIK), ISSN 2444-569X, Else ie , Ams e dam, Vol. 9, Iss. 1, pp.
1-12,
h ps://doi.o g/10.1016/j.jik.2023.100458
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Go e nmen en i onmen al p o ec ion subsidies and co po a e g een
inno a ion: E idence om Chinese mic oen e p ises
Feng Han
a,
*, Xin Mao
a
, Xinyu Yu
a
, Ligao Yang
b
a
School o Economics, Nanjing Audi Uni e si y, PR China
b
School o Economics and Managemen , Changsha Uni e si y o Science & Technology, PR China
ARTICLE INFO
A icle His o y:
Recei ed 6 Decembe 2022
Accep ed 30 Decembe 2023
A ailable online 5 Janua y 2024
ABSTRACT
This pape explo es he impac o go e nmen en i onmen al p o ec ion subsidies on co po a e g een inno-
a ion using panel da a o lis ed companies om 2007 o 2019. The esul s show ha such subsidies can sig-
nifican ly p omo e co po a e g een inno a ion, and he esul s a e obus . Financing cons ain s, esea ch
and de elopmen (R&D) willingness, and esou ce alloca ion e ficiency a e impo an a iables o go e n-
men en i onmen al p o ec ion subsidies o p omo e co po a e g een inno a ion. Fu he analysis shows
ha compa ed wi h indus ial policies a he p o incial le el, he key suppo i e indus ial policies a he
cen al le el ha e a mo e ob ious ein o cing e ec on go e nmen en i onmen al subsidies o p omo e
en e p ise g een inno a ion. Fu he mo e, go e nmen en i onmen al subsidies in he eas e n, middle, and
wes e n egions benefi he p omo ion o en e p ise g een inno a ion, and he p omo ional e ec is s onge
in he middle and wes e n egions. Compa ed wi h s a e-owned en e p ises, go e nmen en i onmen al
subsidies ha e a mo e ob ious p omo ional e ec on p omo ing g een inno a ion o non-s a e-owned en e -
p ises. This pape p o ides s ong heo e ical inspi a ion o be e playing he posi i e incen i e ole o go -
e nmen in e en ion wi h he help o go e nmen en i onmen al p o ec ion subsidies.
© 2024 The Au ho s. Published by Else ie España, S.L.U. on behal o Jou nal o Inno a ion & Knowledge. This
is an open access a icle unde he CC BY-NC-ND license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/)
Keywo ds:
Go e nmen en i onmen al subsidies
Co po a e g een inno a ion
Go e nmen in e en ion
Ex e nali ies
Signal e ec
JEL:
H23
O31
O38
O32
In oduc ion
Today’s wo ld aces se ious challenges, such as en i onmen al
pollu ion, clima e change, and declining biodi e si y, and en i on-
men al go e nance has become an u gen global issue. A e p o-
mo ing he Kyo o P o ocol and he Eco-Inno a ion Plan, he Uni ed
Na ions and he Eu opean Union ha e u he p oposed he 17
Sus ainable De elopmen Goals ( o People, o Plane ), he Pos -
2015 EU and Global De elopmen F amewo k, and he Pa is Ag ee-
men , inco po a ing ecological p o ec ion, sus ainable de elop-
men , and add essing clima e change in o hei long- e m
de elopmen s a egies. The Chinese go e nmen a aches g ea
impo ance o ecological and en i onmen al p o ec ion and has
made en i onmen al p o ec ion a basic s a e policy. The g een
ans o ma ion is China’s basis and sou ce o mo i a ion o sol e
i s esou ce, en i onmen al, and ecological p oblems. In 2020,
China announced i s a ge s o peaking CO
2
emissions by 2030 and
achie ing ca bon neu ali y by 2060. These a ge s eflec China’s
de e mina ion and e o s o p omo e g een and low-ca bon de el-
opmen and ac i ely espond o global clima e change. Gene al
Sec e a y Xi Jinping has also s essed he impo ance o g een
de elopmen a impo an mee ings. In his epo o he 20 h
Na ional Cong ess o he Communis Pa y o China in 2022, he
p oposed “accele a ing he g een ans o ma ion o he de elop-
men mode”and “p omo ing he o ma ion o a g een and low-ca -
bon mode o p oduc ion and li es yle.”
Agains his backd op, g een inno a ion has ecei ed unp ece-
den ed a en ion. The pace o China’s e o s o p omo e indus ial
ans o ma ion, enhance ene gy u iliza ion e ficiency, and de elop
and p omo e g een and low-ca bon echnologies will be significan ly
accele a ed. G een inno a ion, also known as sus ainable inno a ion,
en i onmen al inno a ion, and eco-inno a ion, e e s o en e p ises
in oducing new ideas, beha io s, p oduc s, and p ocesses o educe
hei en i onmen al impac o achie e specific ecological sus ainable
de elopmen goals.
Howe e , many en e p ises lack he mo i a ion o inno a e and
ealize g een ans o ma ion. On he one hand, he low le el o g een
inno a ion echnology in mos en e p ises in China and he high
* Co esponding au ho a : Nanjing Audi Uni e si y, No.86 Yushan Wes Road,
Jiangpu S ee , Pukou Dis ic , Nanjing, China.
E-mail add ess: [email p o ec ed] (F. Han).
h ps://doi.o g/10.1016/j.jik.2023.100458
2444-569X/© 2024 The Au ho s. Published by Else ie España, S.L.U. on behal o Jou nal o Inno a ion & Knowledge. This is an open access a icle unde he CC BY-NC-ND license
(h p://c ea i ecommons.o g/licenses/by-nc-nd/4.0/)
Jou nal o Inno a ion & Knowledge 9 (2024) 100458
Jou nal o Inno a ion
&Knowledge
h ps://www.jou nals.else ie .com/jou nal-o -inno a ion-and-knowledge
p opo ion o adi ional esou ce inpu s ha e led o he unsa is ac-
o y en i onmen al pe o mance o en e p ises. On he o he hand,
g een inno a ion equi es en e p ises o in es subs an ial up on
cos s and bea he isks b ough abou by he unce ain y o inno a-
ion. The go e nmen ’s en i onmen al egula ions also inc ease
en e p ises’p oduc ion and ope a ion cos s. Some en e p ises, espe-
cially p i a e en e p ises, canno ake he ini ia i e o choose g een
ans o ma ion due o he cos p essu e. Bi, Huang and Wang (2016)
a gued ha compa ed wi h adi ional inno a ion, g een inno a ion
has a significan posi i e ex e nali y o knowledge spillo e and a
nega i e ex e nali y o en i onmen al p o ec ion. Tha is, when he
cos o inno a ion is highe han he cos o emission, fi ms will ha e
an incen i e o emi a he han o inno a e. The e o e, fi ms canno
achie e Pa e o-op imal e ficiency, leading o ine ficien esou ce allo-
ca ion (Bai, Song, Jiao & Yang, 2019). The go e nmen mus ake
imely and e ec i e measu es o con ol his ex e nali y (Wu, 2017).
Gene ally, go e nmen subsidies e ec i ely mi iga e ma ke ailu es
in R&D ac i i ies and add ess inno a ion ex e nali ies o d i e g een
inno a ion. They can guide he di ec ion o g een R&D, compensa e
o he lack o unds o g een inno a ion, and educe he isk when
fi ms u gen ly equi e g een inno a ion o comply wi h en i onmen-
al laws and egula ions (Bai e al., 2019;Bi e al., 2016;Li, Liao, Wang
& Huang, 2018).
Ne e heless, ew schola s ha e conduc ed in-dep h esea ch on
he impac mechanism o go e nmen en i onmen al subsidies on
co po a e g een inno a ion, which p o ides an en y poin o his
s udy. I is necessa y o b eak away om he p e ious li e a u e lim-
i ed o explo ing he di ec ela ionship be ween go e nmen subsi-
dies and en e p ise inno a ion and u he explo e he ela ed
conduc ion pa h and influence mechanisms. A de ailed s udy de e -
mining whe he and how go e nmen en i onmen al subsidies can
p omo e en e p ise g een inno a ion by emphasizing g een de elop-
men will ha e essen ial heo e ical inspi a ion and p ac ical signifi-
cance o enhancing en e p ise g een inno a ion, building a g een
inno a ion indus ial sys em, and p omo ing g een de elopmen
ans o ma ion.
Compa ed wi h he exis ing li e a u e, he possible ma ginal
con ibu ions o his pape a e mainly eflec ed in he ollowing
aspec s. (1) F om he pe spec i e o he esea ch objec , his pape
ocuses on he go e nmen en i onmen al p o ec ion subsidies
and confi ms ha his go e nmen al beha io has a mo i a ing
e ec on he g een inno a ion o en e p ises, which p o ides
empi ical e idence o he local go e nmen o p omo e he g een
inno a ion o en e p ises by playing he ole o “posi i e incen-
i es”o he go e nmen en i onmen al p o ec ion subsidies. (2)
F om he pe spec i e o he esea ch mechanism, his pape syn-
hesizes and analyzes he influence mechanism o go e nmen
en i onmen al p o ec ion subsidies on en e p ise g een inno a ion
om financing cons ain s, R&D willingness, and esou ce alloca-
ion e ficiency, which p o ides a new heo e ical analysis ame-
wo k o he subsequen ela ed esea ch. (3) Di e en om
p e ious s udies ha used he numbe o g een pa en applica-
ions o au ho iza ions o measu e g een inno a ion o en e p ises,
his pape uses he numbe o ci ed g een pa en s o en e p ises
(excluding sel -ci a ions) o measu e he le el o co po a e g een
inno a ion. (4) F om he pe spec i e o he u he analysis and
he e ogenei y es s, i e eals he ein o cing ole o cen al indus-
ial policies and p o incial indus ial policies in he p ocess o
go e nmen en i onmen al p o ec ion subsidies’influence on
en e p ise g een inno a ion, which can p o ide new pe spec i es
o he subsequen esea ch on indus ial policies. In addi ion, he
influence o en e p ise loca ion and p ope y igh s he e ogenei y
on he g een inno a ion enhancemen e ec o go e nmen en i-
onmen al subsidies is also explo ed. In conclusion, his pape
expands he exis ing li e a u e on go e nmen en i onmen al sub-
sidies and co po a e g een inno a ion and helps o deepen he
heo e ical unde s anding o he ole o go e nmen en i onmen-
al subsidies in in e ening in ma ke ailu e.
Theo e ical backg ound and esea ch hypo heses
Theo e ical backg ound
As inno a ion subjec s, fi ms play an essen ial ole in achie ing
en i onmen al pe o mance by p oducing, ope a ing, and p omo ing
g een inno a ion p oduc s and p ac ices (Lee & Min, 2015). Xu, Liu
and Shang (2021) showed ha fi ms’inc eased esea ch and de el-
opmen (R&D) in es men posi i ely a ec s g een inno a ion pe o -
mance, and ESG (en i onmen al, social, and go e nance)
pe o mance inc eases he numbe o pa en s o g een in en ions.
Wei, Li, Liu and Du (2022) ound ha as he main body o en e p ise
s a egic decision-making and esou ce alloca ion, op manage s o
en e p ises a e he leading p omo e s o g een inno a ion. Li, Shi,
Han and Zeng (2023) examined he complex impac o new ene gy
indus y agglome a ion on g een inno a ion e ficiency om he pe -
spec i e o spa ial misma ch o R&D esou ces. Han and Mao (2023)
a gued ha en e p ises could ealize in elligen ans o ma ion
h ough human capi al, R&D expendi u es, in o ma ion-sha ing
e ec s, and he media ing ole o ac o alloca ion e ficiency o p o-
mo e g een inno a ion in en e p ises.
Go e nmen en i onmen al subsidies a e a se ies o policies led
by he Minis y o Finance and local go e nmen s a all le els o help
en e p ises conduc en i onmen al p o ec ion equipmen and en i-
onmen al p o ec ion p ocess imp o emen as a kind o go e nmen-
al beha io . Schola s gene ally belie e go e nmen subsidies can
e ec i ely compensa e en e p ises o R&D expenses and pollu ion
con ol cos s in g een echnological inno a ion, posi i ely incen i iz-
ing en e p ise g een inno a ion (Bai e al., 2019;Feldman & Kelley,
2006). Hu (2001) conduc ed empi ical esea ch on da a om China’s
high- ech en e p ises, showing ha he s onge he go e nmen
subsidies, he mo e significan he imp o emen o en e p ises’inno-
a ion pe o mance. Liu, Zhao and Wang (2020) conduc ed an empi -
ical analysis using panel da a om 30 p o inces and ci ies in China
om 2009 o 2017; hei esul s showed ha go e nmen subsidies
posi i ely a ec g een p ocess inno a ion.
Howe e , some li e a u e sugges s ha he influx o go e nmen
subsidies can educe en ep eneu s’ isk- aking spi i and inhibi
inno a ion pe o mance (Bold in & Le ine, 2004;Walls en, 2000).
Fu he mo e, local go e nmen s’“p omo ion ou namen s”can eas-
ily lead o subsidy chea ing and en -seeking by en e p ises, esul ing
in policy ailu es and was e o public esou ces (Jiang e al., 2022).
Consis en conclusions on whe he go e nmen en i onmen al sub-
sidies can e ec i ely p omo e g een inno a ion in en e p ises ha e
no ye been ob ained. The e o e, he ela ionship be ween go e n-
men en i onmen al subsidies and g een inno a ion needs mo e e i-
dence o suppo .
Resea ch hypo heses
Go e nmen en i onmen al subsidies and co po a e g een inno a ion
G een inno a ion aims o educe en i onmen al pollu ion and
conse e na u al esou ces and ene gy (Saunila, Ukko & Ran ala,
2018). As g een inno a ion echnologies and knowledge ha e he
spillo e cha ac e is ics o public goods, g een R&D ac i i ies ine i a-
bly encoun e ma ke ailu e and unde in es men (Tassey, 2004).
Go e nmen en i onmen al subsidies can acili a e g een inno a ion,
which sa isfies he adi ional heo e ical iew o ma ke ailu e and
go e nmen in e en ion (Xia, Gao, Wei & Ding, 2022). En i onmen-
al subsidies a e a policy ool used by go e nmen s o suppo fi ms
in conduc ing high-quali y g een inno a ion R&D ac i i ies and o
educe ma ke ailu es caused by g een echnology spillo e s. Fi s ,
by di ec ly p o iding financial suppo o en e p ises ha mee he
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
2
condi ions o g een inno a ion, go e nmen en i onmen al p o ec-
ion subsidies can alle ia e he cos o in oducing ad anced g een
echnologies and equipmen and s imula e he en husiasm o en e -
p ises o g een inno a ion. Second, he go e nmen can guide he
di ec ion o g een inno a ion, imp o e i s quali y and e ficiency, and
ealize he heal hy de elopmen o en e p ise g een inno a ion by
issuing en i onmen al p o ec ion subsidies o specific p ojec s. Thi d,
go e nmen en i onmen al subsidies can sol e he p oblem o ex e -
nali ies o g een inno a ion. The spillo e e ec o g een echnology
inno a ion is mo e significan han gene al inno a ion. In e media e
p oduc s embedded wi h ad anced g een echnologies om
ups eam indus ies can g ea ly enhance g een inno a ion capabili-
ies and educe pollu ion emissions om downs eam indus ies (Bai
e al., 2019). Finally, go e nmen en i onmen al p o ec ion subsidies
can also alle ia e he ad e se e ec s o esou ce cons ain s on en e -
p ise g een inno a ion R&D ac i i ies (Dimos & Pugh, 2016), educe
he R&D isks bo ne by en e p ises (Takalo, Tanayama & Toi anen,
2013), and guide he esou ce elemen s o ealize a ional alloca ion
(Liu, 2019). Based on he abo e analysis, his pape p oposes he ol-
lowing hypo hesis:
Hypo hesis 1. Go e nmen en i onmen al subsidies can significan ly
p omo e en e p ise g een inno a ion.
Go e nmen en i onmen al subsidies, financing cons ain s, and
co po a e g een inno a ion
Compa ed wi h adi ional inno a ion, g een inno a ion has la ge
inpu s, high isks, and high unce ain y and also has he cha ac e is-
ics o double ex e nali ies o he economy and he en i onmen ;
he e o e, g een inno a ion aces mo e se ious financing cons ain s
(Eb ahimi & Mi ba gka , 2017;Polzin, 2017). Gup a and Ba ua (2018)
showed ha financing cons ain s ha e become a cons ain on co -
po a e g een inno a ion enhancemen shackles. Fi ms need help
ob aining bank loans o p omo e g een inno a ion and ace signifi-
can cos changes, such as he high expense o disposing o haza dous
was e. Go e nmen en i onmen al subsidies can alle ia e he financ-
ing cons ain s o en e p ises and make up o hei financial sho -
alls in he implemen a ion o inno a ion ac i i ies, hus na owing
he gap be ween he social benefi s o g een inno a ion and he bene-
fi s o en e p ises and encou aging en e p ises o conduc g een
inno a ion R&D ac i i ies (Huang, Liao & Li, 2019). On he one hand,
go e nmen subsidies can p o ide di ec inno a ion compensa ion,
alle ia e he p essu e o in e nal financing equi ed o en e p ise
inno a ion ac i i ies, and o e come en e p ises’financial bo lenecks
in ealizing g een inno a ion expec a ions. Go e nmen en i onmen-
al p o ec ion subsidies di ec ly in es unds in o p ojec s and en e -
p ises in ol ed in g een en i onmen al p o ec ion. This in es men
suppo s and incen i izes ele an en e p ises o alloca e unds and
pe sonnel o ad anced en i onmen al p o ec ion ma e ials, ene gy
sa ing and emission educ ion, enewable ene gy, and o he g een
inno a ions, o ming he mos di ec and e ec i e compensa ion o
g een inno a ion and R&D.
On he o he hand, go e nmen en i onmen al subsidies enhance
he ex e nal financing abili y o g een R&D p ojec s h ough signaling
and ce ifica ion e ec s, and hey imp o e he e ficiency o en e p ise
g een inno a ion. Based on he signaling heo y, he go e nmen
uses en i onmen al subsidies as a signal o a o able in es men o
ex e nal in es o s, helping en e p ises o label hemsel es as ecog-
nized by he go e nmen . This si ua ion acili a es en e p ises o
ob ain mo e ex e nal financing o highe -quali y g een inno a ion
(Le ne , 1996;Li, Chen, Gao & Xie, 2019;Wu, 2017). A he same
ime, because go e nmen en i onmen al subsidies can be ega ded
as go e nmen -issued c edi endo semen , hey inc ease he us o
ex e nal in es o s in he en e p ise, educe in o ma ion asymme y,
and enhance he en e p ise’s abili y o ob ain ex e nal financing,
he eby di e si ying and s abilizing R&D capi al in es men
(H€
aussle , Ha ho & M€
ulle , 2012;Meuleman & Maesenei e, 2012).
Recipien en e p ises a e he key a ge s o go e nmen suppo and
a en ion, which can educe he isk assessmen o ex e nal in es o s
on en e p ises’g een inno a ion; hus, en e p ises can o m a mo e
s able expec a ion o he e ec i eness o g een inno a ion and he
quali y o g een p oduc s as well as he epay abili y o c edi unds,
and inc ease he deg ee o us o ex e nal in es o s. Ul ima ely,
go e nmen en i onmen al subsidies can b ing di ec capi al inflow
o en e p ises, send posi i e signals o s akeholde s (Takalo &
Tanayama, 2010), and s i e o mo e capi al inflow om he ou side
wo ld, hus alle ia ing he financing cons ain s en e p ises ace and
enhancing en e p ise g een inno a ion. Based on he abo e analysis,
his pape p oposes he ollowing esea ch hypo hesis:
Hypo hesis 2. Go e nmen en i onmen al subsidies will p omo e
co po a e g een inno a ion by alle ia ing financing cons ain s.
Go e nmen en i onmen al subsidies, R&D willingness, and co po a e
g een inno a ion
Go e nmen en i onmen al p o ec ion subsidies can also inc ease
he willingness o en e p ises o ca y ou g een inno a ion. En e -
p ises ob aining go e nmen en i onmen al p o ec ion subsidies
indica e ha hey can d i e he flow o special unds o he field o
g een inno a ion, enhance he epu a ion and sha e o en e p ises in
he ma ke o g een p oduc s, and compensa e o he isk o poo
pe o mance caused by he ex e nali ies o inno a ion (Hewi -Dun-
das & Rope , 2010); hese ad an ages can enhance fi ms’willingness
o engage in high-quali y g een inno a ion. Fi s , Bai e al. (2019)
a gue ha go e nmen R&D subsidies alloca ed o ene gy-in ensi e
fi ms igge a compe i i e mechanism among fi ms, s imula ing
g een inno a ions o compe e o mo e luc a i e en i onmen al sub-
sidies. Facing ex e nal p essu e o be mo e esponsible o he en i-
onmen and he ma ke demand o g een p oduc s, en e p ises will
be mo e ac i e in conduc ing high-quali y g een inno a ion o
imp o e hei compe i i e ad an ages (Lin, Zeng, Ma & Qi, 2014).
En e p ises can educe he nega i e impac on he en i onmen
h ough g een inno a ion o comply wi h ele an en i onmen al
laws and egula ions, es ablish a posi i e social image as socially
esponsible and conside a e o he masses, and ake social esponsi-
bili y as he co e concep o en e p ise managemen . Such en e p ises
can hen implemen g een s a egies o s eng hen social in e ac ions
wi h he ou side wo ld and seize he po en ial g een ma ke (Huang
& Li, 2017) o imp o e co po a e pe o mance (Wei, Shen, Zhou & Li,
2017). Second, some en e p ises’willingness o inno a e is no s ong
enough due o he high inno a ion isk; howe e , he financial sup-
po b ough by go e nmen subsidies can help en e p ises a oid
isks h ough inno a ion incen i es and ce ifica ion e ec s, which
can help inc ease en e p ises’willingness o implemen g een inno-
a ion (Jiang e al., 2022). Go e nmen en i onmen al subsidies can
elease he a fini y signal o he ela ionship be ween en e p ises and
he go e nmen , enabling en e p ises o ob ain mo e policy suppo ,
such as ax b eaks, loan p e e ences, and p io i y app o als. This si u-
a ion can also inc ease en e p ises’willingness o inno a e and
imp o e he le el o g een inno a ion (Wu, 2017). Finally, he incen-
i e signals eleased by go e nmen en i onmen al p o ec ion subsi-
dies help en e p ises o es ablish a suppo ing g een inno a ion
sys em and cul i a e a no malized awa eness o g een de elopmen
acco ding o he p ojec s anda ds o en i onmen al p o ec ion subsi-
dies. Such en e p ises hen inco po a e he social esponsibili y o
p o ec ing he en i onmen in o hei co po a e s a egies, p omo e
g een p oduc ion me hods, and ac i ely ca y ou g een inno a ion
and R&D ac i i ies. Based on he abo e analysis, his pape p oposes
he ollowing esea ch hypo hesis:
Hypo hesis 3. Go e nmen en i onmen al p o ec ion subsidies can
p omo e co po a e g een inno a ion by enhancing co po a e R&D
willingness.
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
3
Go e nmen en i onmen al subsidies, esou ce alloca ion e ficiency, and
co po a e g een inno a ion
Acco ding o he heo y o go e nmen in e en ion, i is di ficul
o ely solely on he ma ke economic sys em o ealize g een inno a-
ion and achie e he op imal social ou pu . The e o e, he go e n-
men mus co ec he unc ional dis o ion o he ma ke
mechanism on he op imal alloca ion o esou ces o co ec he ma -
ke ailu e o he ma ke mechanism on en e p ise g een inno a ion
(Guo, Xia, Zhang & Zhang, 2018). On he one hand, he lack o a g een
inno a ion ma ke compensa ion mechanism dis o s he p ice o
g een inno a ion ac o s. En e p ises will be mo e inclined o capi al-
in ensi e, high-ene gy consump ion, high ou pu alue o he hea y
chemical indus y o low-le el p ocessing indus y, and a la ge
amoun o capi al in o he high-pollu ion and high-ene gy-consum-
ing indus ies, esul ing in he con inuous de e io a ion o en i on-
men al pollu ion. As a supplemen o he ma ke compensa ion
mechanism, go e nmen en i onmen al p o ec ion subsidies can
play a subs i u e ole, especially when he ma ke compensa ion
mechanism is unsound and impe ec . The non-R&D subsidies in go -
e nmen en i onmen al p o ec ion subsidies can p o ide financial
secu i y o en e p ises o pu chase g een echnology ma e ials and
equipmen and in oduce eme ging echnologies. This app oach
educes en e p ise p oduc ion cos s and indi ec ly incen i izes en e -
p ises o ans e esou ces o g een inno a ion ac i i ies, ac i ely
abso bing new echnologies and s i ing o ans o m hem in o
independen inno a ion.
On he o he hand, go e nmen en i onmen al p o ec ion subsi-
dies c ea e a a ional flow and alloca ion o human esou ces ac o s,
guiding he flow o human esou ces ac o s o g een echnologies
and new indus ies wi h good p ospec s o u u e de elopmen in
line wi h he go e nmen ’s suppo . The signaling e ec o go e n-
men en i onmen al p o ec ion subsidies o ms a con inuous inflow
o unds, a ac ing high-end inno a i e alen s o en e he en e -
p ise by p o iding mo e secu i y and s abili y and accumula ing
high-quali y echnical alen s o en e p ise g een inno a ion
(Acha ya, Baghai & Sub amanian, 2014). Fu he mo e, in elligen and
p ecise p oduc ion occu s, educing unnecessa y was e in p oduc ion
ac i i ies, easing labo alloca ion dis o ion, and ealizing highly e fi-
cien en e p ise g een inno a ion. Fu he mo e, he go e nmen can
p o ide imely expe guidance and ins i u ional suppo o he
p oblems en e p ises ace in g een inno a ion om s age supe ision
and esul s ans o ma ion. Go e nmen en i onmen al subsidies
b ing mo e ex e nal moni o ing and assis ance o en e p ises. Fu -
he mo e, he cons ain s o legi imacy p essu e o ce en e p ises o
ulfill go e nmen con ac s mo e s ic ly, implemen g een inno a-
ion s a egies, and educe unce ain y and esou ce alloca ion dis o -
ion in g een inno a ion (Ma quis & Qian, 2014). Based on he abo e
analysis, his pape p oposes he ollowing esea ch hypo hesis:
Hypo hesis 4. Go e nmen en i onmen al subsidies can p omo e
co po a e g een inno a ion by op imizing he e ficiency o esou ce
alloca ion and hus p omo e g een inno a ion.
In summa y, he heo e ical model o his pape is cons uc ed,
which is shown in Fig. 1.
Me hods and da a
Model se ing
Panel benchma k eg ession model
This pape ’s esea ch objec i e is o examine he e ec o go e n-
men en i onmen al p o ec ion subsidies on en e p ise g een inno-
a ion and e eal he mechanism and cha ac e is ics o i s influence
on g een inno a ion. Combined wi h he p e ious heo e ical
Fig. 1. Theo e ical analysis amewo k.
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
4
analysis, his pape se s up he ollowing measu emen model o e -
i y he e ec o go e nmen en i onmen al p o ec ion subsidies on
en e p ise g een inno a ion:
lnG eeni ¼a0þa1lnSubsidyi þbXþλiþm þei ð1Þ
He e, G een
i
deno es he g een inno a ion capabili y o fi m iin
yea . Subsidy
i
deno es he go e nmen en i onmen al p o ec ion
subsidies ecei ed by fi m iin yea . X is he se o con ol a iables,
including Fi mAge, liabili y, Asse , FinancialLe e age, Re u nOnAsse s,
and TobinQ; aand ba e coe ficien s and coe ficien ec o s o be es i-
ma ed. λ
i
and m
a e fi m and yea fixed e ec s, espec i ely, and e
i
is
a andom dis u bance e m. The econome ic model, including con-
ol a iables, is as ollows:
lnG eeni ¼a0þa1lnSubsidyi þb1Fi mAge þb2liabili y þb3Asse
þb4FinancialLe e age þb5Re u nOnAsse s þb6Tobin þλiþm þei
ð2Þ
whe e b
1
−b
6
deno e he coe ficien s o he e ec s o each con ol
a iable on co po a e g een inno a ion.
Mechanism es ing model
This pape in oduces h ee mechanism a iables (financing con-
s ain s, R&D willingness, and esou ce alloca ion e ficiency) based
on he baseline eg ession o ca y ou he mechanism es . This
app oach allows us o e i y he mechanism o go e nmen en i on-
men al p o ec ion subsidies ha p omo e en e p ise g een inno a-
ion by alle ia ing financing cons ain s, enhancing R&D willingness,
and op imizing esou ce alloca ion e ficiency based on heo e ical
analysis. The specific mechanism es model is as ollows.
Mi ¼Qþu0lnSubsidyi þ X
$
¼1
Wi þhiþy þzi ð3Þ
He e, Qis a cons an e m. M ep esen s a ious mechanism a i-
ables, including financing cons ain s, R&D willingness, and esou ce
alloca ion e ficiency. Wis he se o con ol a iables consis en wi h
he baseline eg ession model. u
0
and a e coe ficien s and coe fi-
cien ec o s o be es ima ed, and $is he numbe o con ol a ia-
bles; h
i
and y
a e fi m fixed e ec s and yea fixed e ec s,
espec i ely, and z
i
is a andom dis u bance e m.
Va iable selec ion and indica o measu emen
The dependen a iable is en e p ise g een inno a ion (lnG een).
Whe he g een echnological inno a ion esul s can be apidly dis-
semina ed, p omo ed, and applied de e mines he influence and ec-
ogni ion o g een inno a ion and i s alue in p omo ing en e p ises’
g een de elopmen . An essen ial echnological b eak h ough will
ine i ably be ecognized, p omo ed, and applied by mo e and mo e
economic agen s, gene a ing g ea e social and economic alue.
The e o e, compa ed wi h he me e numbe o g een pa en applica-
ions o au ho iza ions, he ci a ion s a us o en e p ise g een pa en s
be e eflec s he ex en o which g een inno a ions a e ecognized,
accep ed, p omo ed, and dissemina ed. This app oach helps measu e
he impac , inno a ion alue, and inno a ion quali y o en e p ise
g een inno a ions. The g een pa en ci a ion da a is di ided in o wo
pa s: he numbe o ci a ions o g een pa en s applied o and he
numbe o ci a ions g an ed. Each pa con ains he numbe o ci a-
ions pe yea (cumula i e) and he numbe o ci a ions pe yea
(cumula i e), excluding sel -ci a ions. Among hem, he numbe o
ci a ions excluding sel -ci a ions is he numbe o ci a ions o he pa -
en s in he co esponding yea excluding pa en companies,
subsidia ies, join en u es, and associa es wi hin he g oup. This
pape uses he loga i hmic alue o he cumula i e numbe o ci a-
ions in each yea o g een pa en s applied by lis ed companies
(excluding sel -ci a ions) plus one o measu e co po a e g een inno-
a ion. Fo obus ness, his pape also uses he ollowing p oxy a ia-
bles o co po a e g een inno a ion: he cumula i e numbe o
ci a ions in each yea o he applied g een pa en s (lng een1); he
numbe o ci a ions in each yea o he applied g een pa en s exclud-
ing sel -ci a ions (lng een2); he numbe o ci a ions in each yea o
he au ho ized g een pa en s excluding sel -ci a ions (lng een3); he
numbe o g een in en ions independen ly applied in he same yea
(lng een4); he numbe o g een u ili y models independen ly applied
in he same yea (lng een5).
The independen a iable is go e nmen en i onmen al subsidies
(lnSubsidy). This pape uses he na u al loga i hm o he o al amoun
o go e nmen en i onmen al subsidies announced by lis ed compa-
nies o measu e. Go e nmen subsidies a e ans e paymen s, i.e.,
go e nmen unds a e ans e ed o en e p ises di ec ly o indi-
ec ly. Go e nmen en i onmen al subsidies ake he o m o cash
g an s (including special alloca ions, go e nmen in e es a es, and
ee subsidies), ax exemp ions o eba es, and in-kind subsidies
(including he alloca ion o land and equipmen a no cos and he
supply o land and equipmen a a low cos ). Specifically, his pape
selec s he loga i hmic amoun o he sum o en i onmen al p o ec-
ion- ela ed g an s unde he go e nmen g an s line i em in he
no es o he financial s a emen s o lis ed companies as a measu e o
go e nmen en i onmen al p o ec ion g an s.
Con ol a iables: This pape selec s a iables closely ela ed o
g een inno a ion o con ol, including he ollowing six con ol a i-
ables. The Fi mAge a iable is measu ed by he loga i hmic alue o
sub ac ing he cu en yea om he lis ed yea . The liabili y a iable
is measu ed by he a io o o al liabili ies a he end o he yea o
o al asse s a he end o he yea . The Asse a iable is he a io o ne
fixed asse s and ne in en o ies o o al asse s. The FinancialLe e age
a iable is he a io o o al financial liabili ies a he end o he yea
o o al asse s. The Re u nOnAsse s a iable is measu ed as he a io o
ne p ofi o o al asse s a he end o he pe iod. The TobinQ a iable
is measu ed by he fi m’s ma ke capi aliza ion a io o o al asse s.
Se e al mechanism a iables a e included, beginning wi h (1)
financing cons ain s. This pape e e s o he esea ch idea o Kaplan
and Zingales (1997) o calcula e he KZ index o he deg ee o financ-
ing cons ain s o lis ed companies. The la ge he KZ index, he
highe he financing cons ain s aced by lis ed companies and he
lowe he financing e ficiency. (2) In his pape , he loga i hm o he
amoun o R&D in es men is used o measu e R&D willingness. (3)
This pape adop s he loga i hm o o al ac o p oduc i i y o en e -
p ises o measu e he esou ce alloca ion e ficiency, ollowing Olley
and Pakes (1992).
Da a sou ces
This pape ’s annual g een pa en ci a ion da a o lis ed en e p ises
a e mainly based on he g een pa en classifica ion numbe s anda d
published by he Wo ld In ellec ual P ope y O fice. These da a a e
ob ained by comp ehensi ely and sys ema ically sc eening and so -
ing he pa en s om he S a e In ellec ual P ope y O fice and Google
Pa en . The da a o lis ed en e p ises a e ob ained om he China
S ock Ma ke and Accoun ing Resea ch da abase. A e me ging and
ma ching, he unbalanced panel da a o mo e han 20,000 en e p ise
samples om 2007 o 2019 a e finally colla ed. Table 1 shows he
desc ip i e s a is ics o he a iable da a.
Analysis o empi ical esul s
Benchma k eg ession
He e ogenei y may exis ac oss fi ms and yea s, and hese he e o-
genei ies a e o en di ficul o obse e and measu e. The esul s o
he Hausman es show ha es ima ion using a fixed e ec s model is
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
5
mo e app op ia e han a andom e ec s model. Thus, his pape uses
he panel fixed e ec s model o es ima e Eqs. (1) and (2); Table 2
p esen s he eg ession esul s.
Column (1) epo s he esul s o go e nmen en i onmen al sub-
sidies on fi ms’g een inno a ion wi hou conside ing con ol a ia-
bles and fixed e ec s. The coe ficien on go e nmen en i onmen al
subsidies (lnSubsidy) is significan ly posi i e a he 1% le el, indica -
ing a significan posi i e ela ionship be ween go e nmen en i on-
men al subsidies and fi ms’g een inno a ion. Column (2) epo s he
esul s o he e ec o go e nmen en i onmen al subsidies on fi m
g een inno a ion, con olling only o fi m and yea fixed e ec s. The
coe ficien o go e nmen en i onmen al subsidies is significan ly
posi i e. Tha is, wi hou conside ing o he ac o s, go e nmen en i-
onmen al subsidies ha e a significan ole in p omo ing en e p ise
g een inno a ion. This esul indica es ha he go e nmen will
p omp en e p ises o conduc g een inno a ion ac i i ies h ough
financial subsidies, policy subsidies, ax b eaks, and o he en i on-
men al subsidy policies. This si ua ion will encou age en e p ises o
in es unds and esou ces in o he g een inno a ion field hey we e
eluc an o be o e o enhance he le el o en e p ise g een inno a-
ion. Finally, his pape g adually conside s he e ec s o con ol a i-
ables and fixed e ec s in columns (3) and (4). The esul s indica e
ha he coe ficien s o he go e nmen ’s en i onmen al p o ec ion
subsidies a e s ill significan ly posi i e and ela i ely s able, sugges -
ing ha a e con olling o fi m cha ac e is ics, go e nmen en i-
onmen al subsidies can significan ly p omo e he de elopmen o
co po a e g een inno a ion. The es ima ion esul s in Table 2 p elim-
ina ily indica e ha go e nmen en i onmen al subsidies signifi-
can ly p omo e en e p ise g een inno a ion; hus, hypo hesis 1 is
p o ed.
Robus ness es
Conside ing he possible p oblems o ex eme alues, a iable
measu es, and endogenei y in he eg ession esul s, his pape con-
duc s he ollowing obus ness es s.
(1) Conside he p oblem o ex eme alues o he sample: This pape
analyzes eg ession a e winso izing and unca ing ex eme al-
ues o he co e explana o y a iable o elimina e he influence o
ex eme alues on he eg ession esul s. Columns (1) and (2) o
Table 3 show he eg ession esul s a e winso izing and unca -
ing a 2.5% o he co e explana o y a iable, espec i ely. A com-
pa ison wi h he benchma k eg ession esul s shows ha he
coe ficien o he e ec o go e nmen en i onmen al p o ec ion
subsidies on co po a e g een inno a ion dec eases sligh ly a e
excluding he ex eme alues o he sample; howe e , i is s ill
significan ly posi i e, indica ing ha he baseline eg ession
esul s a e obus . In o he wo ds, go e nmen en i onmen al
p o ec ion subsidies significan ly p omo e co po a e g een inno-
a ion.
(2) Conside di e en measu es o co po a e g een inno a ion: The e
a e o he indica o s men ioned abo e can be used o measu e co -
po a e g een inno a ion. A he same ime, Zhou e al. (2023)
a gue ha pa en da a can accu a ely iden i y he ad an ages o
g een echnologies, and g een pa en s can eflec he g een inno-
a ion abili y o en e p ises. The e o e, his pape uses he ollow-
ing al e na i e indica o s o measu e en e p ise g een inno a ion:
he cumula i e numbe o ci a ions in each yea o he applied
g een pa en s (lng een1); he numbe o ci a ions in each yea o
Table 1
Desc ip i e s a is ical analysis o a iables.
Va iable Mean SD Min Max
lnG een 1.2685 0.6277 0.0000 5.0499
lng een1 1.2691 0.6278 0.0000 5.0499
lng een2 0.3813 0.5095 0.0000 4.2195
lng een3 0.3634 0.4975 0.0000 4.1897
lng een4 2.6543 1.8058 0.0000 7.7790
lng een5 1.7333 1.5918 0.0000 6.3099
lnSubsidy 14.6294 2.0287 5.7991 20.9701
Fi mAge 2.6232 0.4464 0.0000 3.3673
liabili y 0.5559 0.2247 0.0145 10.4953
Asse 0.3407 0.1458 0.0000 0.9542
FinancialLe e age 0.3756 0.2211 0.0000 0.9874
Re u nOnAsse s 0.0278 0.1079 7.7001 0.6243
TobinQ 1.4739 0.8589 0.7154 56.6643
financing cons ain s 1.1618 1.7306 11.3445 11.7108
R&D willingness 20.5239 2.1126 7.4085 25.0252
esou ce alloca ion e ficiency 2.0345 0.1209 1.4069 2.3477
Table 2
Reg ession esul s o he impac o go e nmen en i onmen al p o ec ion sub-
sidies on co po a e g een inno a ion.
Va iable (1) (2) (3) (4)
lnSubsidy 0.0076*** 0.0089*** 0.0060*** 0.0115***
(4.6428) (3.3347) (3.8846) (4.0165)
Fi mAge 0.4754*** 0.0802***
(53.7841) (5.6733)
liabili y 0.1198*** 0.1196***
(5.1585) (2.8921)
Asse 0.2069*** 0.0731*
(7.2575) (1.7177)
FinancialLe e age 0.1177*** 0.1060***
(6.0152) (3.7036)
Re u nOnAsse s 0.2993*** 0.1716**
(8.9488) (2.3762)
TobinQ 0.0211*** 0.0033
(5.3341) (0.4434)
_cons 1.0550*** 1.0993*** 0.1102*** 1.0029***
(43.2410) (28.0020) (3.1277) (19.1619)
Hausman es 21.70 5305.45
[0.0000] [0.0000]
Fi m FE No Yes No Yes
Yea FE No Yes No Yes
N25,734 25,734 25,381 25,381
R
2
0.0020 0.0124 0.3849 0.0192
No es:.
*p<0.1.
** p<0.05.
*** p<0.01; - alues a e in pa en heses o columns (2) and (4); z- alues in
pa en heses o columns (1) and (3); p- alues a e in squa e b acke s.
Table 3
Robus ness es I.
Va iable (1) Winso =0.025 (2) T im=0.025
lnSubsidy 0.0098*** 0.0061**
(3.7347) (2.5064)
Fi mAge 0.0757*** 0.0784***
(6.1857) (7.2531)
liabili y 0.1028*** 0.0853**
(2.6397) (2.3398)
Asse 0.0600 0.0445
(1.4498) (1.1187)
FinancialLe e age 0.1099*** 0.0969***
(4.0052) (3.7120)
Re u nOnAsse s 0.1402** 0.0999
(2.0717) (1.5408)
TobinQ 0.0048 0.0033
(0.6715) (0.4776)
_cons 1.0328*** 1.0372***
(20.6544) (21.6154)
Fi m FE Yes Yes
Yea FE Yes Yes
N25,381 24,473
R
2
0.0149 0.0127
No es:.
*p<0.1.
** p<0.05.
*** p<0.01; - alues a e in pa en heses.
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
6
he applied g een pa en s, excluding sel -ci a ions (lng een2); he
numbe o ci a ions in each yea o he au ho ized g een pa en s
excluding sel -ci a ions (lng een3); he numbe o g een in en-
ions independen ly applied in he same yea (lng een4); he
numbe o g een u ili y models independen ly applied in he
same yea (lng een5). These indica o s a e hen eg essed. The
esul s shown in Table 4 show ha he go e nmen en i onmen-
al p o ec ion subsidy coe ficien is s ill significan ly posi i e a e
eplacing he en e p ise g een inno a ion measu emen indica-
o s, indica ing ha he co e findings o his pape emain obus .
(3) Conside ing endogenei y issues: This pape u he uses he
lagged a iable, ins umen al a iable, and wo-s age leas
squa es me hods o es he model and alle ia e he possible
endogenei y p oblem. Rega ding ins umen al a iable selec ion,
his pape u ilizes he lagged one pe iod o go e nmen en i on-
men al subsidies and he mean alue o go e nmen en i onmen-
al subsidies ecei ed by o he fi ms in he indus y as
ins umen al a iables, espec i ely. This ins umen al a iable
sa isfies he ele ance and exclusion c i e ia. Rega ding ele ance,
he go e nmen en i onmen al p o ec ion subsidies ecei ed by
o he en e p ises in he same indus y a e ele an o he go e n-
men en i onmen al p o ec ion subsidies ecei ed by his en e -
p ise. Compe i ion exis s among en e p ises in he indus y,
which p omp s en e p ises o imi a e each o he in g een ans-
o ma ion. In e ms o exclusion, go e nmen en i onmen al sub-
sidies ecei ed by o he fi ms in he same indus y should no
di ec ly a ec he g een inno a ion o his fi m.
Table 5 epo s he esul s o he es s a e conside ing endogene-
i y issues. Column (1) epo s he es ima ion esul s using he lagged
a iable me hod, whe e he significance and sign o he coe ficien on
go e nmen en i onmen al subsidies do no change. Column (2)
epo s he esul s o he ins umen al a iable es using he mean
alue o go e nmen en i onmen al subsidies ecei ed by o he fi ms
in he indus y as an ins umen al a iable. The coe ficien o go e n-
men en i onmen al subsidies is s ill significan and posi i e a he
1% le el, and he Hausman es ejec s he o iginal hypo hesis ha all
he explana o y a iables a e exogenous; hus, he ins umen al a i-
able me hod’s es ima ion is easonable. Column (3) epo s he
esul s o a wo-s age leas squa es eg ession using he co e explan-
a o y a iables lagged by one pe iod and he mean alue o
go e nmen en i onmen al subsidies ecei ed by o he fi ms in he
indus y as ins umen al a iables. Fu he mo e, he coe ficien on
go e nmen en i onmen al subsidies is s ill significan ly posi i e.
The Kleibe gen−Paap k LM s a is ic ejec s he unde -iden ifica ion
es , and he Kleibe gen−Paap k Wald F ejec s he es o weak
ins umen al a iables. These esul s indica e ha he selec ion o
ins umen al a iables is easonable, and he Hansen es has a
Table 5
Robus ness es III.
Va iable (1) Lagged a iable
me hod
(2) Ins umen al
a iable me hod
(3) 2SLS
l.lnSubsidy 0.0139***
(4.1946)
lnSubsidy 0.0256*** 0.0257***
(6.4937) (2.6935)
Fi mAge 0.0891*** 1.0629*** 0.1677***
(5.0681) (84.4562) (3.1013)
liabili y 0.1070** 0.1340*** 0.1357**
(2.1468) (4.7734) (2.1178)
Asse 0.1114** 0.0354 0.0291
(2.2362) (0.9404) (0.3203)
FinancialLe e age 0.1519*** 0.1425*** 0.2339***
(4.5064) (4.9172) (3.6904)
Re u nOnAsse s 0.1094 0.2137*** 0.0643
(1.4947) (6.3635) (1.1262)
TobinQ 0.0090 0.0224*** 0.0018
(1.1288) (5.0769) (0.2055)
_cons 1.0963*** 1.6778***
(16.8082) (23.0320)
Hausman es 37.9600
[0.0000]
Kleibe gen-Paap k LM 563.4750
[0.0000]
Kleibe gen-Paap k Wald F 381.0420
Hansen es 1.3910
[0.2383]
Fi m-FE Yes Yes Yes
Yea -FE Yes Yes Yes
N18,757 25,343 11,229
R
2
0.0259 0.0009
No es:.
*p<0.1.
** p<0.05.
*** p<0.01; - alues a e in pa en heses; p- alues a e in squa e b acke s.
Table 4
Robus ness es II.
Va iable (1) lng een1 (2) lng een2 (3) lng een3 (4) lng een4 (5) lng een5
lnSubsidy 0.0119*** 0.0097*** 0.0083*** 0.0193*** 0.0217***
(4.1708) (5.3246) (5.3831) (3.5740) (4.3523)
Fi mAge 0.0770*** 0.0674*** 0.0065 0.3454*** 0.4493***
(5.4750) (7.3008) (0.9092) (12.3050) (19.7155)
Liabili y 0.1185*** 0.0867*** 0.1023*** 1.9385*** 2.7662***
(2.8662) (3.7245) (4.8172) (21.7325) (32.3412)
Asse 0.0718*0.1176*** 0.0832*** 0.3788*** 0.2744***
(1.6868) (4.7587) (3.5984) (4.9282) (3.4848)
FinancialLe e age 0.1067*** 0.0168 0.0501*** 2.3807*** 1.8590***
(3.7316) (0.9943) (3.1740) (43.7874) (33.8663)
Re u nOnAsse s 0.1734** 0.1524*** 0.0403 1.4848*** 1.3628***
(2.4039) (3.4411) (0.9818) (9.9261) (7.5016)
TobinQ 0.0036 0.0118** 0.0114** 0.1085*** 0.1983***
(0.4951) (2.3985) (2.3281) (6.1979) (11.5106)
_cons 1.0054*** 0.4037*** 0.2249*** 2.8259*** 1.9864***
(19.2173) (12.4411) (7.2667) (24.3108) (19.1900)
Fi m-FE Yes Yes Yes Yes Yes
Yea -FE Yes Yes Yes Yes Yes
N25,381 25,381 25,380 23,781 23,781
R
2
0.0189 0.2084 0.2085 0.2495 0.2130
No es:.
*p<0.1.
** p<0.05.
*** p<0.01; - alues a e in pa en heses.
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
7
concomi an p obabili y g ea e han 10%, hus accep ing he o iginal
hypo hesis ha all ins umen al a iables a e alid. The abo e esul s
indica e ha go e nmen en i onmen al subsidies can significan ly
p omo e co po a e g een inno a ion a e conside ing he endogene-
i y issue and es ima ing using he lagged a iable me hod, ins u-
men al a iable me hod, and wo-s age leas squa es me hod.
Mechanism es and u he analysis
Mechanism es
The benchma k eg ession only b iefly analyzes he impac o
go e nmen en i onmen al p o ec ion subsidies on co po a e g een
inno a ion and does no e i y he mechanism pa h o i s implica-
ions. The e o e, his pape cons uc s a mechanism es model, i.e.,
eg ession o Eq. (3); he esul s a e shown in Table 6. The esul s o
he mechanism es e i y he mechanism o go e nmen en i on-
men al subsidies o p omo e he de elopmen o co po a e g een
inno a ion by alle ia ing financing cons ain s, enhancing R&D will-
ingness, and op imizing esou ce alloca ion e ficiency. Column (1) o
Table 6 epo s he mechanism es esul s o he financing con-
s ain channel. The coe ficien o go e nmen en i onmen al p o ec-
ion subsidies is significan ly nega i e, indica ing ha go e nmen
en i onmen al p o ec ion subsidies di ec ly alle ia e he financing
cons ain s o en e p ises and hus help en e p ises in g een inno a-
ion. Go e nmen en i onmen al p o ec ion subsidies can help en e -
p ises alle ia e financing cons ain s by p o iding hem wi h di ec
capi al inflow and helping hem a ac ma ke capi al h ough he
signal e ec .
In addi ion o a ec ing financing cons ain s, go e nmen en i-
onmen al subsidies may also a ec fi m g een inno a ion by influ-
encing fi ms’willingness o conduc R&D and esou ce alloca ion
e ficiency. Columns (2) and (3) o Table 6 epo he es esul s a e
eplacing he mechanism a iables wi h R&D willingness and
esou ce alloca ion e ficiency, espec i ely. As shown, enhancing
R&D willingness and op imizing esou ce alloca ion e ficiency a e
also impo an channels o go e nmen en i onmen al subsidies o
p omo e g een inno a ion o en e p ises. On he one hand, he go -
e nmen en i onmen al p o ec ion subsidies educe he isk o g een
R&D and p o ide incen i es o en e p ises o seize he g een ma ke ,
enhancing he willingness o en e p ises o g een inno a ion. On he
o he hand, he go e nmen en i onmen al p o ec ion subsidies will
also be used as a powe ul ool o make up o he sho comings o
he ma ke mechanism and guide he flow o esou ces owa d mee -
ing social de elopmen needs. This si ua ion is conduci e o op imiz-
ing he e ficiency o esou ce alloca ion and hus p omo ing he
g een inno a ion o en e p ises o enhance and ul ima ely achie e
g een de elopmen .
Fu he analysis
The p e ious sec ion examined he impac o go e nmen en i-
onmen al subsidies on co po a e g een inno a ion; howe e , he
e ec o go e nmen en i onmen al subsidies on co po a e g een
inno a ion may also show di e ences wi h he he e ogeneous cha -
ac e is ics o indus ial policies and en e p ises. The e o e, his pape
discusses he dimensions o indus ial policy, he egion’s he e oge-
nei y, and en e p ise p ope y igh s o en e p ises o e eal some
egula cha ac e is ics o go e nmen en i onmen al subsidies a ec -
ing g een en e p ise inno a ion.
(1) Fu he analysis based on indus ial policy: As an essen ial ac o
in en e p ises’p oduc ion and ope a ion en i onmen , indus ial
policy has an impo an impac on he g een inno a ion ac i i ies
o en e p ises. Indus ial policy is he main go e nmen in e en-
ion o ealize specific economic de elopmen goals by guiding
indus ial de elopmen . Di e en policies a e needed because he
si ua ion o he same indus y in a ious fields o social ep oduc-
ion o en di e s. Fu he mo e, indus ial policy is implemen ed
using economic, adminis a i e, legal, and disciplina y means. I
sugges s ha he go e nmen ’s a i ude owa d he ele an
indus ies a ec s hei de elopmen p ospec s, i.e., indus ies sup-
po ed by policy p io i ies may be ea ed mo e a o ably, and he
acili a ing e ec o go e nmen en i onmen al subsidies on
en e p ise g een inno a ions may be s eng hened. This pape
examines he ole o policy suppo and o he influences by con-
s uc ing ele an dummy a iables and in oducing in e ac ion
e ms wi h go e nmen en i onmen al subsidies in o he mea-
su emen Eq. (2) o es ima ion. Specifically, his pape uses he
indus ial policy da abase in China Resea ch Da a Se ices, which
ex ac s he ele an indus ies and planning con en s men ioned
in he fi e-yea plan ou line, summa izes he ele an indus ial
policies o he cen al go e nmen and p o inces, and es ablishes
he co esponding dummy a iables. En e p ises belonging o he
Table 6
Mechanism es s o he impac o go e nmen en i onmen al p o ec ion subsidies on co po a e g een inno a-
ion.
Va iable (1) Financial cons ain s (2) R&D willingness (3) Resou ce alloca ion e ficiency
lnSubsidy 0.0446*** 0.1608*** 0.0166***
(9.2163) (21.9231) (38.6556)
Fi mAge 0.0052 0.2909*** 0.0050***
(0.2516) (9.0865) (2.7014)
liabili y 5.2862*** 2.9109*** 0.2543***
(71.7946) (23.2496) (29.8915)
Asse 0.7970*** 0.0928 0.0365***
(12.0065) (0.6800) (4.8406)
FinancialLe e age 1.0200*** 3.4572*** 0.1378***
(22.3401) (44.6120) (27.6153)
Re u nOnAsse s 7.4618*** 3.6282*** 0.4135***
(20.2880) (14.1763) (20.1661)
TobinQ 0.1767*** 0.6635*** 0.0347***
(10.1627) (29.1131) (22.6756)
_cons 1.6654*** 18.6670*** 1.6855***
(15.4267) (133.7916) (204.3295)
Fi m-FE Yes Yes Yes
Yea -FE Yes Yes Yes
N25,124 24,321 24,199
R
2
0.6221 0.4248 0.4701
F. Han, X. Mao, X. Yu e al. Jou nal o Inno a ion & Knowledge 9 (2024) 100458
8
