Brand orientation and firm innovation quality: the moderation role of AI development and government subsidies

In the context of the digital economy, digital technology is an important driving force to promote green development and achieve the “dual-carbon goal”. Taking 1746 Shanghai and Shenzhen A-share enterprises from 2015 to 2022 as research objects, we empirically examine the relationship between government subsidies, digital transformation, and corporate green technology innovation. The study shows that (1) there is an inverted “U”-shaped relationship between government subsidies and corporate green technological innovation, while digital transformation plays a mediating role, and there is a difference between the quality and quantity of digital transformation in promoting green technological innovation. (2) Through the analysis of the moderating effect, it is found that market concentration has an obvious inhibitory effect between enterprise digital transformation and green technology innovation. (3) The study, by classifying the nature of enterprises, shows that the promotion effect of digital transformation on green technology innovation is weaker under heavily polluted enterprises than under non-heavily polluted enterprises, but the promotion interval of the relationship between government subsidies and green technology innovation is larger. Therefore, enterprises should make full use of digital technology to inject new impetus into their innovation activities, and the government should fully consider the appropriate space for enterprises to receive subsidies, make reasonable use of the incentive effect of government subsidies, and smooth the information docking channels for government and enterprise subsidies.

Subsidies from the government and financial resources from external investors play critical roles in supporting firm innovations. We develop a model to empirically investigate the role of firm innovation efficiency in government subsidy allocations and the joint effect of innovation efficiency and government subsidies on external investor decision-making in China. We collect panel data from 337 firms in China over ten years (2011–2021). The results show an inverted U-shaped relationship between innovation efficiency and government subsidies. Both government subsidies and innovation efficiency are positively associated with external financing. Government subsidies positively moderate the impact of innovation efficiency on external financing. The findings provide empirical evidence of the complex relationships among firm innovation efficiency, government subsidies and external financing. In this study, insights are provided into how Chinese government officials and external investors interpret signals of firm innovation. The findings of this study can also be used by managers to attract financial resources and by investors to make investment decisions.

Promoting the development of new energy vehicles is one of the important measures to ensure energy security and deal with global warming. Technological innovation is an inexhaustible driving force for the development of the new energy vehicle industry. This study considered listed enterprises in China’s new energy vehicle industry as research samples and used the fixed effect model to study the impact of government subsidies on the quantity and quality of technological innovation in the new energy vehicle industry. The empirical results show that government subsidies have a significant positive impact on the quantity of technological innovation in the new energy vehicle industry; however, government subsidies have no significant impact on the quality of technological innovation. Government subsidies increase the quantity of technological innovation in the new energy vehicle industry by increasing R&D investment, mitigating financing constraints, and improving the external attention of enterprises. Compared to downstream enterprises in the industrial chain, government subsidies have a better incentive effect on the technological innovation of upstream enterprises, which increases the number of patents and enhances the quality of utility model patents. Government subsidies have a better effect on promoting the quantity of technological innovation in large enterprises.

This paper evaluates the causal relationship between government subsidy and the innovation performance of new energy firms through count models using 2007–2021 data from China’s listed new energy companies. By looking at the subsidy for listed new energy firms and the number of granted patents, we find government subsidy policies significantly boost firms’ innovation performance. We estimate that a tenfold increase in government subsidy would lead to an increase of 7.11 in the total number of granted patents for new energy firms. Furthermore, a heterogeneity analysis shows such an effect varies depending on the nature of property rights, subsidy scale, and region for new energy firms. To be specific, state-owned firms are more dependent on government subsidy, the effect on innovation is generally higher in the high-subsidy group than in the low-subsidy group while being higher in the low-subsidy group when it comes to low-tech design patents, and firms in the eastern region are most sensitive to government subsidy. This paper also assesses the role of R&D investment in how government subsidy policies boost firms’ innovation performance; that is, by increasing their R&D funding investment rather than R&D manpower investment. These findings illustrate that in developing countries, government subsidy is effective in boosting new energy firms’ innovation performance.

This paper investigates the influence effects of government subsidies on the innovation of family-owned enterprises in China through a panel data model and Heckman two-stage model, and explores the possible influence mechanisms of government subsidies on different innovation behaviors of family-owned enterprises through a mediation analysis method. It is found that government subsidies play a significant role in promoting innovation input, innovation quantity and innovation quality of family-owned enterprises. From the perspective of innovation quality, government subsidies are more beneficial to family-owned enterprises without “two jobs in one” or “2nd generation succession”. Compared with family-owned enterprises that have completed intergenerational inheritance, government subsidies are more conducive to enhancing the innovation quantity of family-owned enterprises that have not achieved “2nd generation succession”. We find also that government subsidies can indirectly improve the innovation quality of family-owned enterprises by increasing the proportion of state-owned shares and easing the financing constraints. By organically integrating two relatively independent research fields (effectiveness of government subsidy and innovation of family businesses), this paper opens up a new way of thinking for exploring the sustainability of family businesses.

This paper investigates the impact of population agglomeration on the relation between government subsidies and firm innovation. It constructs a parsimonious model to show that the positive effect of government subsidies on innovation by small-cap enterprises should be pronounced only in regions with higher population densities. Moreover, using the ‘mass entrepreneurship and innovation’ policy implemented by the Chinese government in 2015, and the resulting boost in government subsidies to small-cap enterprises as a natural experiment, the paper confirms the theoretical prediction and demonstrates that population density strengthens the positive relationship between government subsidies and firm innovation in small-cap enterprises. When the population density of a region is below a certain threshold (1100 people/km2), the positive connection between government subsidies and technological innovation disappears.

Research on the mechanism of government subsidy on enterprise innovation based on industry-university-research collaboration

Do government subsidies achieve the goals of stimulating firm innovation and macro-regulation? Existing studies have not reached a consistent conclusion. We will study the incentive effect of government subsidies on innovation of biopharmaceutical firms, analyze the optimal interval of government subsidies, and improve the efficiency of government subsidies. Thus, based on kink threshold model using data from Chinese biopharmaceutical listed companies from 2013-2019, this study analyzes the impact of government subsidies on innovation inputs and outputs. Government subsidies can stimulate innovation inputs and outputs of biopharmaceutical firms. Meanwhile, such subsidies have a significant threshold effect on innovation inputs and outputs, and there is an optimal interval effect. Additionally, concerning enterprise ownership, government subsidies have a more significant role in promoting innovation of non-state biopharmaceutical firms. Regarding regional differences, such subsidies have a more significant role in promoting innovation of firms in the less economically developed central and western regions. This study reveals the influence pattern of government subsidies, and provides insights and suggestions to formulate subsidy policies and enhance innovation.

PurposeThis study aims to comprehensively investigate the relationship between government subsidies and innovation performance in Chinese enterprises listed on the SSE STAR Market.Design/methodology/approachAn unbalanced sample, covering 285 observations in 215 enterprises listed on the SSE STAR Market from 2019 to 2020, was used to explore the relationships between government subsidies, R&D investment, CEO shareholding and innovation performance. Counterfactual analysis is added for robustness testing.FindingsEmpirical evidence confirms that government subsidies have an inverted U-shaped relationship with R&D investment and innovation performance. Meanwhile, R&D investment is a mediating variable between government subsidies and innovation performance. Moreover, CEO shareholding plays a moderating role between government subsidies and R&D investment. The higher the CEO ownership, the steeper the inverted U-shaped relationship.Practical implicationsThe government should introduce a dynamic mechanism to reasonably control subsidy amounts and strengthen the supervision of subsidy use. Enterprise managers should be aware of how incentives affect the firm’s innovation and implement a coordinated development of government subsidy policies and internal enterprise governance.Originality/valueThis study adds new empirical evidence for the relationship between government subsidies and enterprise innovation performance. The risk incentive provided by stock options is an important micro mechanism to compensate for the lack of government subsidies. The study identifies ways to promote firm innovation based on the synergistic effect of internal and external mechanisms.

This paper takes A-share listed manufacturing companies in China from 2010 to 2017 as the research sample, makes a theoretical and empirical study on the internal relationship among market expectation gaps, market expectation ratings and enterprise innovation behaviors, and further explores the moderating mechanism of institutional coverage and government subsidies. The results show that: Firstly, the greater the gap of market expectation is, the greater the pressure of enterprise managers on performance is, and the greater the probability of enterprises increasing innovation input is. Secondly, the higher the market expectation rating of the current investment value of enterprises is, the more likely investors are to make reverse investment. Managers need to improve the current performance to attract investors, and the probability of enterprises reducing innovation input is greater. Thirdly, institutions are concerned about enhancing the positive effect of market expectation gaps on enterprise innovation input, and government subsidies sometimes change the positive relationship between the two. Fourthly, both institutional coverage and government subsidies enhance the negative impact of market expectation ratings on enterprise innovation. The research contributions are as follows: Firstly, the performance predictions and investment grades of listed manufacturing companies from external stakeholders are objectively measured by the market expectation gaps and ratings of external market institutions, and how they influence enterprise managers’ innovation decision-making is discussed in depth, which enrich the research perspective of enterprise innovation behaviors. Secondly, from the dual external perspectives of capital market environment and government institutional environment, this paper explores the moderating and restrictive role played by two external governance factors, namely institutional coverage and government subsidies, between market expectation and enterprise innovation input, and expands the situational mechanism research in the field of enterprise performance feedback theory and signal transmission theory. The implications of this research on management practice are as follows: Firstly, managers should pay attention to the future development prospects of enterprises and take the initiative to undertake innovation risks in order to achieve the long-term expectation of the capital market. Secondly, the government should strengthen the construction of the capital market system and give full play to the external governance and supervision effects of brokerage intermediaries. Thirdly, the government should pay more attention to the construction and improvement of the institutional and market environment, encourage enterprises to innovate constantly.

How the government subsidies will change the performance of firm’s innovative projects has long been debated. We attempt to narrow this gap from a dynamic perspective by employing Chinese A-share listed firms as a sample. Based on the novel innovation index, we studied the impact of government subsidies on the persistence of firm innovation. Findings show that total government subsidies promote the persistence of overall firm innovation. However, when we divided the total government subsidies into technological subsidies and non-technological subsidies, we found that technological subsidies cast an inhibitory effect on the persistence of self-sustaining firm innovation. In further analysis, we discover that ‘self-sustaining firm innovation investment replacement’ phenomenon can explain the crowding-out effect of technological subsidies on self-sustaining firm innovation persistence. Based on empirical evidence, we also observed that the substitution of private innovation investment by technological subsidies may result in management costs. These findings offer a theoretical foundation for further enhancing the effectiveness of government subsidy policies.

PurposeThe purpose of this study is to examine the moderating effect of two types of external funds in terms of loan and government subsidy on the relationship between R&D investment and firms' innovation performance in emerging markets, as well as the contingent role of firm leader's international experience associated with the effects of loan and government subsidy.Design/methodology/approachThe authors tested the hypotheses using a longitudinal dataset of 716 high-tech firms of Zhongguancun Science Park (ZSP) in China during 2008–2014, covering detailed information on the operations, financial situation and R&D activities, patents, etc. The authors finally identified an unbalanced panel of 2,430 firm-year observations. Considering the dependent variable is the countable data and non-negative values, the negative binomial regression with fixed effects was adopted to test the hypotheses.FindingsThe results show that the more loans or government subsidies the firm receives, the weaker the positive effect of R&D investment on firms' innovation performance in emerging markets. Furthermore, the findings reveal that firm leaders' international experience can mitigate the negative moderating effect of government subsidies, but strengthen the negative moderating effect of loans.Originality/valueThe study provides new insights into how loans and government subsidies as external funds influence the effectiveness of R&D in enhancing innovation performance, and the findings highlight the fact that more external funds can reduce firm R&D efficiency. Moreover, the authors also enrich the resource orchestration theory by revealing the critical role of firm leaders' international experience in the decision-making of resource configuration to mitigate the inefficiency of high subsidies in emerging markets.

It is worth studying whether enterprises receiving government subsidies can transform them into innovative achievements under the constraints of enterprise resources. The data from the three industries of electronics, pharmaceuticals, and information technology during 2013-2016 were empirical tested to verify the moderating effect of the absorbed slack on the relationship between government subsidies and enterprise innovation. The results show that government subsidies can promote enterprise innovation; absorbed slack promotes enterprise innovation; the absorbed slack of enterprises plays a positive moderation role in the relationship between government subsidy and enterprise innovation. In other words, the enterprises with high absorbed slack can promote the innovation of enterprises by government subsidies. The conclusions provide theoretical guidance for government departments to select the most suitable enterprises which accept innovative subsidies.

The effect of the policy mix of green credit and government subsidy on environmental innovation

So far, Korean rural areas could hardly have chances to arising food clusters, due to weak industrial infrastructure of non-agriculture sectors. However, for adjust to WTO Agriculture Agreement upon implementation, the government took the various measures in domestic agriculture policies be focused on the development of regional-agriculture cluster and branding of agricultural production. Under these circumstances, branding of agricultural production was contributed to expansion of food-based business areas and organizing agricultural producers as a motivation of food cluster. Followings are characteristics and problems concerning to agricultural policy and challenges be related to food cluster.First, the agri-food policy has been actively involved to the branding of agricultural productions and development of agri-food cluster in Korea. The development of standards in the marketing of food distribution, branding guidance to agricultural products and pilot projects for the food cluster formation, are the related efforts.Secondly, the most noticeable pattern is to expand the business area as like production line expansion and finding service or processing sectors in local level agri-food cluster.Thirdly, many factors prevent the development of the cluster be required cooperation as well as competition among related local companies. To point out problems, it could be summarized spot transaction on products sales, exclusive in-sourcing led by production side and dependence on government subsidies.