Does internationalization encourage state-owned enterprises to utilize subsidies to innovate? Evidence from high-tech and automobile manufacturing industries of Chinese listed companies

Purpose Drawing on the resource-based view, institutional logic and isomorphic pressure theories, this study constructed a theoretical model to explore the correlations between government subsidies and innovation performance. Particularly, this study aims to investigate the moderating effects of ownership types and degree of internationalization on these relationships. Design/methodology/approach To empirically test the relationships, the authors use panel data from high-tech manufacturing and automobile manufacturing industries in Chinese A stock listed companies for the period 2011–2015 and performed regression analysis. Findings Results indicate that government subsidies positively enhance enterprises’ innovation performance; there is a big gap between government subsidies’ incentive effect on innovation performance between state-owned enterprises (SOEs) and private-owned enterprises (POEs); with the improvement of internationalization, the promotion effect of government subsidies on enterprise innovation performance is strengthened; there is a three-way interaction between government subsidies, degree of internationalization and ownership types, such that in the presence of a low degree of internationalization, there is a big gap in the incentive effect of government subsidies on the innovation performance of SOEs and POEs; in the presence of a high degree of internationalization, the gap is significantly reduced. Originality/value This is an empirical study on the impact mechanism of ownership types and internationalization on the relationship between government subsidies and innovation performance in China. It provides valuable insights to show how internationalization can dramatically improve SOEs’ efficiency disadvantages in the allocation of government subsidies to innovation activities.

How Do Environmental Subsidies Affect The Environmental Performance of Heavy Polluting Enterprises：Evidence From China

Taking 257 heavily polluted A-share listed companies in Shanghai and Shenzhen from 2010 to 2017 as research samples, this paper investigates the impact effect and mechanism of environmental subsidies on enterprise environmental performance. The study found that environmental subsidies have a positive incentive effect on the environmental performance of heavy polluting enterprises, and its positive incentive effect mainly plays a role through three channels: promoting green technology innovation, increasing government environmental supervision and enhancing executives' environmental awareness. Further research shows that environmental subsidies have a more significant promoting effect on environmental performance in non-state-owned enterprises and enterprises with high degree of financing constraints and high level of risk taking. Based on the perspective of environmental benefits of micro enterprises, this paper not only provides direct evidence at the micro level for the implementation effect of government environmental subsidies, but also provides a reference basis for the government to improve the specific implementation path of environmental subsidies. At the same time, it also provides reference for the government to implement directional regulation and accurate implementation of policies according to the particularity of enterprises with different characteristics.

Simulation Research on Information-Sharing Value of Two-Level Supply Chain

In the two-stage supply chain model, the incentive effect to the supplier’s sharing of demand information and performance evaluation and the effect of various parameters on the incentive effect of the supply chain are studied through a multiagent simulation model constructed for the purpose. It is found that the incentive coefficient of demand information-sharing degree, the number of selected suppliers, the order allocation coefficient, and the order proportion are positively related to the incentive effect of demand information sharing. So, the greater the demand information sharing is, the greater the impact of these parameters on the incentive effect is. Based on the demand information sharing, the supplier performance evaluation rules are shared, and when the actual evaluation rules are inconsistent with the supplier’s expectations, the incentive effect is further enhanced. Other parameters do not affect the incentive effect of demand information sharing and performance evaluation rule sharing.

DRŽAVNA POMOĆ ZA ISTRAŽIVANjE I RAZVOJ I INOVACIJE KOJA SE MORA PRIJAVITI

According to Council Regulation (EU) 2015/1588 of 13 th July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid the Commission may declare state aid for research&development and innovation compatible with the internal market and are not subject to the notification requirement of Article 108(3) TFEU. Authorized by mentioned Regulation, Commission adopted Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty and stipulated conditions under which state aid for research&development and innovation is exempted from the notification requirement. It does not mean that state aid which does not fulfill prescribed conditions is forbidden. State aid which does not fulfill envisaged conditions can be considered compatible with the internal market if after notification to the Commission it assessing it separately establishes that it satisfies each of the following criteria: contribution to a well-defined objective of common interest; need for State intervention; appropriateness of the aid measure; incentive effect; proportionality of the aid (aid limited to the minimum); avoidance of undue negative effects on competition and trade between Member States and transparency of aid

Study on Agricultural Product-coupled Subsidy Policy Considering Output Uncertainty and the Development of Tobacco Agriculture

Objectives: The health and well-ordered development of tobacco agriculture is very important. The incentive effects of plant-coupled subsidies and output-coupled subsidies on farming decisions with the consideration of uncertainty are investigated. The study shows that if the same unit subsidy is adopted, the incentive effect of the two policies will be determined by the expected output. When the expected output is higher, the incentive effect of the output-coupled subsidy is better than that of the plant-coupled subsidy. And when the expected output is lower, the incentive effect of the plant-coupled subsidy is better. If the implementation scheme limits the total amount of subsidies, it is better to determine subsidy policy by optimal output. The higher the optimal output is, the better the plant-coupled subsidy is. And when the optimal output is relatively low, the output-coupled subsidy shows a better incentive effect. Meanwhile, the study results also show that the incentive effects of the two coupled subsidy policies for increasing production and income are consistent, and the advantages of the policy with better incentive effects increase as the amount of subsidies increases.

The Power of Renegotiation and Monitoring in Software Outsourcing: Substitutes or Complements?

Monitoring and contract renegotiation are two common solutions for addressing information asymmetry and uncertainty between a client and a vendor of software outsourcing services. Monitoring is mostly applied in time-and-materials contracts, as a basis for inspecting and reimbursing the vendor’s efforts in system development. Renegotiation, by contrast, is deployed in fixed-price and time-and-materials contracts to mitigate the loss of surplus from uncertainty after system development. We investigate the interaction between monitoring and renegotiation and examine the corresponding contract choice problem. We find that the client benefits from renegotiation based on two effects: an uncertainty-resolution effect and a post-development incentive effect, which incentivizes the vendor to exert additional effort in system development. Monitoring does not resolve uncertainty, although it does encourage the vendor to exert additional effort, a pre-development incentive effect. Our analysis shows that the choice of renegotiation or monitoring depends on the interactions of the above effects, which are moderated by the renegotiation cost, monitoring cost, and bargaining power in renegotiation. When renegotiation cost is low: if the client has high bargaining power and low monitoring cost, monitoring and renegotiation are complements and both are selected; otherwise, the two instruments are substitutes and contract renegotiation is preferred. When renegotiation cost is high: monitoring substitutes for renegotiation and the client only chooses monitoring if the cost to do it is low; or else neither is used. Overall, this research shows that four appropriate contract strategies should be used under somewhat different circumstances. We further analyze the impacts of some other key aspects of software outsourcing and extend the base model to address two alternative situations to show the robustness of our findings. The results apply to a range of software reliability growth models, including when machine learning or cloud computing are used.

Impact of Quality and Government Subsidies on Elderly Care Services

In order to solve the problem of imbalance resource allocation and service income in the elderly care service industry, this article establishes three service income models in different situations for a single provider and a single integrator while considering the quality as well as government subsidies. The results showed that government subsidies can significantly improve quality efforts and service income with a mutual restriction between quality and service income. Government subsidies would have an impact on the quality, and they are more conducive to the service income of providers. When government subsidies are less than 80% of the service income, the incentive effect is better.