Innovation strategies of Chinese new energy vehicle enterprises under the influence of non-financial policies: Effects, mechanisms and implications

Abstract

With the gradual withdrawal of subsidized policies for new energy vehicles (NEVs) in China, it is important to effectively leverage non-financial policies to provide incentives for high-quality innovation. We selected data from 2012 to 2019 to examine the impact of different types of non-financial policies (direct intervention and indirect guidance) on substantive or strategic innovation by NEV enterprises, as well as the existing policy mechanisms. We found that direct interventions represented by the market access policy have the greatest overall promotion effect, with a significant signaling mechanism, and are more able to stimulate substantive innovation. Among the indirect guidance measures, the dual-credit policy has a significant market competition mechanism, but is more likely to favor strategic innovation; although the government procurement policy has an obvious signaling mechanism, its overall effect is relatively small. We further found that the market access policy and the dual-credit policy are more effective among the low political connected NEV enterprises, while the government procurement policy performs better among the high political connected enterprises. Therefore, it is very necessary to vigorously develop the non-financial policies for NEVs while noting the characteristics and emphasis of different types of policies at the same time.