Government support and the corporate innovation

In order to thoroughly investigate the effects and internal mechanism of government innovation support policies, this paper takes the research and development subsidy policies and tax preferential policies proposed in the "National Medium and Long-term Science and Technology Development Plan Outline (2006-2020)" as the research object, adopts the double difference method based on propensity score matching identifies the double effects of government innovation support policies. The empirical results show that the government R&D subsidy policy has both the effects of "pre-incentive" and "post-reward", which significantly improves the innovation ability of corporate, while preferential tax policies cannot promote corporate innovation. Further analysis shows that continuous and stable R&D subsidies, geographical dispersion of business operations, and external innovation environment have significantly strengthened the positive effect of innovation support policies on corporate innovation. This article not only makes up for the existing research on the ignorance of the internal motivation and potential mechanism of government innovation support policies, but also extends the research perspective from "government hands" to "market hands", makes a necessary supplement to the logic chain of policy influence on corporate innovation capability. This paper reveals the internal law of the implementation of government innovation support policies, provides theoretical support and policy suggestions for government support to drive corporate innovation for our country to cope with increasingly fierce international competition and realize the innovation-driven development strategy. © 2022 Systems Engineering Society of China. All rights reserved.