IDEAS home Printed from https://ideas.repec.org/a/wsi/ijimxx/v28y2024i03n04ns1363919624500129.html
   My bibliography  Save this article

The Impacts Of Innovation Efficiency And Government Subsidy On External Financing: Evidence From China

Author

Listed:
  • HONGWEI CAO

    (Queen’s Business School, Queen’s University Belfast, United Kingdom)

  • MIN ZHANG

    (Queen’s Business School, Queen’s University Belfast, United Kingdom)

  • HANGFEI GUO

    (Queen’s Business School, Queen’s University Belfast, United Kingdom)

  • MARK PALMER

    (Queen’s Business School, Queen’s University Belfast, United Kingdom)

Abstract

Subsidies from the government and financial resources from external investors play critical roles in supporting firm innovations. We develop a model to empirically investigate the role of firm innovation efficiency in government subsidy allocations and the joint effect of innovation efficiency and government subsidies on external investor decision-making in China. We collect panel data from 337 firms in China over ten years (2011–2021). The results show an inverted U-shaped relationship between innovation efficiency and government subsidies. Both government subsidies and innovation efficiency are positively associated with external financing. Government subsidies positively moderate the impact of innovation efficiency on external financing. The findings provide empirical evidence of the complex relationships among firm innovation efficiency, government subsidies and external financing. In this study, insights are provided into how Chinese government officials and external investors interpret signals of firm innovation. The findings of this study can also be used by managers to attract financial resources and by investors to make investment decisions.

Suggested Citation

  • Hongwei Cao & Min Zhang & Hangfei Guo & Mark Palmer, 2024. "The Impacts Of Innovation Efficiency And Government Subsidy On External Financing: Evidence From China," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 28(03n04), pages 1-29, May.
  • Handle: RePEc:wsi:ijimxx:v:28:y:2024:i:03n04:n:s1363919624500129
    DOI: 10.1142/S1363919624500129
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1363919624500129
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1142/S1363919624500129?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:ijimxx:v:28:y:2024:i:03n04:n:s1363919624500129. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ijim/ijim.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.