Government subsidies and innovation quality: The role of economic policy uncertainty and financial technology

Jianwang Liu and Weifeng Xia

Finance Research Letters, 2025, vol. 83, issue C

Abstract: Using data from Chinese listed companies between 2013 and 2022, this paper examines how government subsidies influence innovation quality. It also considers external shocks, particularly economic policy uncertainty (EPU) and financial technology (FINTECH). The results show that government subsidies significantly enhance both average and overall innovation quality. However, EPU weakens this positive effect, while FINTECH strengthens it. Robustness tests confirm the reliability of these findings. The study underscores the importance of increasing government subsidies, mitigating EPU, and advancing FINTECH development.

Keywords: Innovation quality; Financial technology; Government subsidy; Digitalization (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009171

DOI: 10.1016/j.frl.2025.107658

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