How does government R&D subsidies affect enterprises’ viability? An investigation on inverted U-shaped relationship

Yajie Han, Liyan Han, Chengkun Liu and Qisong Wang

Finance Research Letters, 2024, vol. 70, issue C

Abstract: Based on the theory of New Structural Economics, this study investigates the non-linear relationship between government R&D subsidies (RDS) and enterprises’ viability (VIA) in China, utilizing data from A-share listed advanced manufacturing enterprises. The findings reveal an inverted U-shaped relationship, where VIA initially increases and subsequently decreases as RDS intensifies. Furthermore, we examine the impact of technological convergence between the digital and real economy industries (TCG) on this relationship and find that TCG strengthens the curvilinear relationship. This study provides valuable insights for formulating advanced manufacturing policies that address structural needs, thereby fostering high-quality development of the real economy.

Keywords: Advanced manufacturing enterprises; Government R&D subsidies (RDS); Viability; Generalized Data Envelopment Analysis (GDEA); New Structural Economics (NSE) (search for similar items in EconPapers)
JEL-codes: G3 H2 L6 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324012649

DOI: 10.1016/j.frl.2024.106235

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