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How do nonsubsidized incentive affect enterprises' innovation choices? A case from the new energy vehicle industry in China

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  • Wang, Xi
  • Xiong, Zhen
  • Li, Xingong
  • Xiong, Yongqing

Abstract

Faced with the mainstream trend of subsidy reduction, how to effectively guide NEV enterprises to innovate through nonsubsidized incentive is a pressing issue to be addressed in the transformation process of China’s NEV industry. Based on the distinctive characteristics of China's NEV industry, this study proposed corresponding theoretical hypotheses combined with the smile curve theory. Propensity score matching method was used to verify the influence and mechanism of nonsubsidized incentive on the innovation choices of NEV enterprises in segments of production and consumption. The results indicate that nonsubsidized incentive in the production segment stimulates the product innovation of NEV enterprises, especially those with political and industrial chain connections through mechanism of market competition. Nonsubsidized incentive in the consumption segment stimulates service transitions among NEV enterprises, particularly those lacking political connections but possessing industrial chain connections, through mechanism of scale expansion. Therefore, to promote the innovative development of emerging industries, policy should be shifted from ‘transfusion-style’ to ‘hematopoietic-style’, gradually cultivating enterprises' independent innovation capabilities. Meanwhile, policy resources should be allocated according to resource differences among enterprises. This study provides practical policy recommendations for the transformation of China's NEV industry and offers insights into the development of emerging industries for developing countries.

Suggested Citation

  • Wang, Xi & Xiong, Zhen & Li, Xingong & Xiong, Yongqing, 2024. "How do nonsubsidized incentive affect enterprises' innovation choices? A case from the new energy vehicle industry in China," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    • Handle: RePEc:eee:tefoso:v:204:y:2024:i:c:s0040162524002415
    DOI: 10.1016/j.techfore.2024.123445
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