Research on Role of Public R&D Subsidies among Small and Medium-Sized Enterprise

Abstract

One of the features, the output R&D investment is has the properties of the public product, its private yields below its social returns. Therefore, public R&D subsidy plays an important role. In this paper, we study the influence of public research subsidies on firm innovation in the transition economies, and to examine whether public R&D subsidies can directly affect the performance of the small and medium-sized enterprises. We assume this empirical study the role of public R&D subsidy in China’s small and medium-sized enterprises. The empirical results based on a data set (2007-2008) from the listed companies in China’s small and medium-sized enterprise board. Regression analysis showed significantly positive effects on firm public R&D subsidy innovation, and not directly influences the company performance. At the same time, this result also shows that there is a strong link between the company innovation and firm performance. Although it is the direct contributions are, the company performance contribution indirectly through public R&D subsidies to promote enterprise innovation performance of spending.