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The impact of “Mass Entrepreneurship and Innovation” policy on SMEs’ innovation: Using quasi‐natural experiments

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  • Kai Zhao
  • Wanshu Wu
  • Junmei Ye

Abstract

This study presents an in‐depth investigation of the impact of “Mass Entrepreneurship and Innovation” (MEI) policy on small and medium‐sized enterprises’ (SMEs’) innovation using the propensity score matching–difference‐in‐difference method. The MEI policy's R&D subsidies are found to generate a positive effect on SMEs’ innovation. Although R&D subsidies have no significant impact on SMEs’ strategic innovation, they can promote substantial innovation and establish a solid microfoundation for China's high‐quality development. Compared with R&D subsidies, tax incentives in the MEI policy cannot encourage SMEs to innovate and may even have a negative impact on SMEs’ innovation.

Suggested Citation

  • Kai Zhao & Wanshu Wu & Junmei Ye, 2023. "The impact of “Mass Entrepreneurship and Innovation” policy on SMEs’ innovation: Using quasi‐natural experiments," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 348-365, April.
    • Handle: RePEc:bla:buecrs:v:75:y:2023:i:2:p:348-365
    DOI: 10.1111/boer.12359
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