Do government subsidies stimulate enterprises' innovation? Evidence from China's listed companies

Government RD subsidies on enterprises' private RD expenditure. RD subsidies have stimulation effects and crowding- out effects,but there is no consistent answer. The research has utilized micro data of listed companies in China from 2010 to 2012 and applied PSM( Propensity Score Matching) method to analyze the effects of RD subsidies. The results show that RD subsidies in China are distributed to enterprises with higher autonomy in management,shorter listed age,and larger scale of employees and domestic property right and having RD activities. The research discovered that RD subsidies have significantly stimulated enterprises' RD expenditures in China.