Research on the Relationship of Government subsidies and Enterprise performance

As for emerging market economies with imperfect market mechanism, the guiding role of government in the development and innovation of SMEs is very necessary. This paper selects listed companies on GEM between 2012 to 2014 as analysis objects and multivariate regression model has been applied to study the impact of government policies of science and technology on the R&D and innovation performance of SMEs. The results have showed that: direct government subsidies has eased the financial pressure on businesses, which can facilitate the improvement of business performance; government policies to adopt reduction and exemption or tax refund for enterprises can facilitate the R&D and innovation performance of enterprises. Finally, the article has further analysis of the causes and the corresponding countermeasures to address these issues.