Abstract
This paper studies the effect of government research and development (R&D) subsidies and political relations on the innovative activities of technological small and medium-sized enterprises (SMEs). Moreover, the technology innovation path of SMEs is an important issue related to government R&D subsidies. This paper explores these effects using multiple case studies. Through case analyses of four biological pharmaceutical enterprises, we found that first, technological SMEs that receive a significant amount of government R&D subsidies will transform from exploitative innovation to explorative innovation in a short amount of time, whereas technological SMEs that receive less government R&D subsidies will perform less innovative activities over a long time. Second, technological SMEs with strong political relations tend to do more explorative innovation, whereas technological SMEs with weak political relations tend to do more exploitative innovation. Third, technological SMEs with strong political relations will promote the positive effect of government R&D subsidies on their innovation performance.
Highlights
As the main force behind national innovation, technology innovation is an important contributor to sustainable development for technological small and medium-sized enterprises (SMEs)
This paper studies the effect of government research and development (R&D) subsidies and political relations on the innovative activities of technological small and medium-sized enterprises (SMEs)
Through case analyses of four biological pharmaceutical enterprises, we found that first, technological SMEs that receive a significant amount of government R&D subsidies will transform from exploitative innovation to explorative innovation in a short amount of time, whereas technological SMEs that receive less government R&D subsidies will perform less innovative activities over a long time
Summary
As the main force behind national innovation, technology innovation is an important contributor to sustainable development for technological small and medium-sized enterprises (SMEs). Gao (2011; 2012) demonstrated the influence of different stages of the enterprise life cycle on government R&D subsidies for technological SMEs. Most domestic scholars studied large- and medium-sized enterprises, demonstrating the relationship between Chinese government R&D subsidies and selfR&D investment of large and medium-sized enterprises utilizing regional statistical data from a macro level (Li Ping, 2010; Wang Chunhui, Cheng Hua, Zhao Xiang, 2009; Cheng Hua, 2008). Foreign research focused on the relationship between government R&D subsidies and self-R&D investment from the economics theory background of market failure, and few studies on the effect of government R&D subsidies on the specific activities of enterprise technological innovation are available. This paper studies Chinese technological SMEs and explores the effects of government R&D subsidies on the technological innovation path of SMEs, which supplements current domestic and foreign research. We summarize the research conclusion and the limitations of the paper
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