혁신보조금 효과의 이질성 연구: 중국 상장기업의 재무제약과 재무위험을 중심으로

Abstract

Firms’ investment in new technology is known as one of the vital factors for national economic development and growth. Despite its importance, adequate investment in R&D is difficult to achieve because of the enormous costs in terms of money and time and no guarantee of success. Therefore, public innovation subsidies are expected to play a key role in compensating for this market failure and activating private innovation. Improving the efficiency of R&D subsidies has been the subject of a long-standing discussion. This study investigates the heterogeneous effects of government R&D subsidies on the innovation activities of firms facing different financial constraints and risk levels. Financial constraints can be a key obstacle to firms’ innovation activities, and firms’ risk-taking attitudes can be the lubricant for innovation. Existing literature identifies variables that affect the effectiveness of public R&D subsidies, such as a firm’s age, size, location, and industry. However, these factors do not clearly distinguish the basic firm characteristics that affect the effectiveness of R&D subsidies—namely, financial constraints and innovativeness. To the best of our knowledge, this study is the first to examine and compare firm heterogeneity with respect to these two factors. Panel data on Chinese listed companies for the period 2007 to 2018 were used in this study. The data included 14,085 observations from 2,875 firms. Study findings indicate that innovation subsidies significantly increase firms’ R&D inputs and outputs only in firms with low cash holdings or high financial risks. In contrast, R&D subsidies do not promote innovation in firms with high cash holdings and low risk levels. Moreover, these two factors have different effects on firms’ sensitivity to R&D subsidies differently in terms of innovation inputs and outputs. Specifically, a firm’s cash holdings better explain its sensitivity to innovation inputs, and a firm’s risk level better explains its sensitivity to innovation outputs. That is, R&D subsidies increase firms’ innovation inputs only for firms with fewer cash holdings, regardless of risk levels. Meanwhile, R&D subsidies increase firms’ innovation outputs only for firms with higher risk levels, regardless of financial constraints. These findings suggest that public R&D subsidies could be executed much more efficiently when they are injected into firms that need financial support and demonstrate the ability to use the funding effectively. Cash holdings and financial risk levels are two criteria to screen out financially constrained and innovative firms. In conclusion, financially constrained and risky firms should be subsidized first to increase the effect of R&D subsidies on both firms’ innovation inputs and outputs.