The Impact of R&D and Non-R&D Subsidies on Technological Innovation in Chinese Electric Vehicle Enterprises

Abstract

The effectiveness of government subsidies for electric vehicle (EV) enterprises and future improvements to subsidy policies to promote industry development have garnered widespread attention. Distinct mechanisms exist through which R&D and non-R&D subsidies impact enterprise innovation. This paper differentiates between R&D and non-R&D subsidies and uses data from listed companies and New Third Board companies in China from 2013 to 2022 to empirically analyze the effects of these two types of subsidies on the innovation of EV enterprises from the perspectives of innovation strategy and the industrial chain. The results show that both R&D and non-R&D subsidies effectively alleviate the inhibiting effects of financing constraints. R&D subsidies significantly incentivize innovation in EV enterprises, whereas the effect of non-R&D subsidies is not as pronounced. The incentivizing effect of R&D subsidies exhibits two distinct characteristics: first, R&D subsidies compel enterprises to choose an innovation strategy that prioritizes “quantity over quality”; second, R&D subsidies exert a more pronounced influence on enterprises in the upper and middle sectors of the EV industrial chain compared to downstream enterprises, which tend to engage in more strategic innovation behaviors.