The Impact of Subsidy Rollback on Innovation Performance of New Energy Vehicle Firms: An Empirical Study Based on the Difference-in-Differences Method
(2025) BUSN79 20251Department of Business Administration
- Abstract
- Purpose: This study aims to explore the path of policy adjustment on enterprise innovation performance in the context of fiscal subsidy rollback in China's NEV industry, focusing on the changes in the dimensions of enterprise R&D inputs and patent outputs and further analyzing the moderating role of enterprise size in the process of policy impact.
Methodology: Based on the panel data of 132 NEV-related listed companies in China's A-share market from 2010 to 2022, this paper adopts the Difference-in-Differences (DID) method to identify the causal impact of the fiscal subsidy rollback policy on enterprises' innovation performance and introduces interaction terms to analyse the policy's heterogeneity. The interaction term is introduced to... (More) - Purpose: This study aims to explore the path of policy adjustment on enterprise innovation performance in the context of fiscal subsidy rollback in China's NEV industry, focusing on the changes in the dimensions of enterprise R&D inputs and patent outputs and further analyzing the moderating role of enterprise size in the process of policy impact.
Methodology: Based on the panel data of 132 NEV-related listed companies in China's A-share market from 2010 to 2022, this paper adopts the Difference-in-Differences (DID) method to identify the causal impact of the fiscal subsidy rollback policy on enterprises' innovation performance and introduces interaction terms to analyse the policy's heterogeneity. The interaction term is introduced to construct a heterogeneity analysis model to explore the moderating effect of enterprise size.
Theoretical perspectives: The study takes the dynamic capability theory and Resource-Based View (RBV) as the theoretical foundation, combines it with Signaling Theory to explain the adjustment mechanism of enterprises' behavior in the context of subsidy withdrawal, and constructs a 'policy change-enterprise behaviour-innovation performance' model.
Empirical foundation: The study's data sources include the Wind database, CSMAR database, State Intellectual Property Office, and other official channels. The samples cover NEV manufacturers and core parts enterprises. Two key time points, 2014 and 2019, enhance the credibility and stage-by-stage explanatory power of the empirical identification.
Conclusions: The empirical results show that (1) the financial subsidy rollback has a significant inhibitory effect on the overall R&D investment of NEV enterprises, while it has a particular incentive effect on the patent application, reflecting the two-way impact of policy on innovation performance; (2) enterprise size shows a significant moderating effect in the policy path, and large enterprises are more sensitive to R&D investment but more resilient and more flexible to patent application in terms of R&D investment. This study helps to deepen the understanding of the relationship between subsidy exit mechanisms and enterprise innovation. It provides theoretical support and practical reference for the government to formulate differentiated policies and enterprises to optimize innovation strategies. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9192271
- author
- Hou, Qi LU and Pan, Jiaming LU
- supervisor
- organization
- course
- BUSN79 20251
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- fiscal subsidy rollback, new energy vehicle (NEV), enterprise innovation performance, Difference-in-Differences method (DID), enterprise size.
- language
- English
- id
- 9192271
- date added to LUP
- 2025-06-13 09:25:10
- date last changed
- 2025-06-13 09:25:10
@misc{9192271,
abstract = {{Purpose: This study aims to explore the path of policy adjustment on enterprise innovation performance in the context of fiscal subsidy rollback in China's NEV industry, focusing on the changes in the dimensions of enterprise R&D inputs and patent outputs and further analyzing the moderating role of enterprise size in the process of policy impact.
Methodology: Based on the panel data of 132 NEV-related listed companies in China's A-share market from 2010 to 2022, this paper adopts the Difference-in-Differences (DID) method to identify the causal impact of the fiscal subsidy rollback policy on enterprises' innovation performance and introduces interaction terms to analyse the policy's heterogeneity. The interaction term is introduced to construct a heterogeneity analysis model to explore the moderating effect of enterprise size.
Theoretical perspectives: The study takes the dynamic capability theory and Resource-Based View (RBV) as the theoretical foundation, combines it with Signaling Theory to explain the adjustment mechanism of enterprises' behavior in the context of subsidy withdrawal, and constructs a 'policy change-enterprise behaviour-innovation performance' model.
Empirical foundation: The study's data sources include the Wind database, CSMAR database, State Intellectual Property Office, and other official channels. The samples cover NEV manufacturers and core parts enterprises. Two key time points, 2014 and 2019, enhance the credibility and stage-by-stage explanatory power of the empirical identification.
Conclusions: The empirical results show that (1) the financial subsidy rollback has a significant inhibitory effect on the overall R&D investment of NEV enterprises, while it has a particular incentive effect on the patent application, reflecting the two-way impact of policy on innovation performance; (2) enterprise size shows a significant moderating effect in the policy path, and large enterprises are more sensitive to R&D investment but more resilient and more flexible to patent application in terms of R&D investment. This study helps to deepen the understanding of the relationship between subsidy exit mechanisms and enterprise innovation. It provides theoretical support and practical reference for the government to formulate differentiated policies and enterprises to optimize innovation strategies.}},
author = {{Hou, Qi and Pan, Jiaming}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Impact of Subsidy Rollback on Innovation Performance of New Energy Vehicle Firms: An Empirical Study Based on the Difference-in-Differences Method}},
year = {{2025}},
}