The Threshold effect of fiscal and financial Policies on Technological Innovation- an empirical study of Chinese Wind Power Industry

Daojuan Wang, Wei Gao, Liyu Fang

Research output: Contribution to conference without publisher/journalConference abstract for conferenceResearchpeer-review

Abstract

Previous studies focused on the relationship between fiscal policy and technological innovation from a linear perspective, and revealed that the government subsidies have an influence. However, few studies research on the relationship between financial policy and technology innovation, and investigate whether there is a nonlinear relationship between the policy and technological innovation. We also have limited knowledge about the impacting factors. These represent the focuses of this study. Based on the entropy weight method and game theory modeling, this paper concludes: (1) there is a threshold effect among fiscal policy, financial policy and technology innovation of wind power industry, and there is an optimal interval. Only the government subsidy or the amount of bank credit in a certain range can the innovation of the wind power industry to be promoted to a maximum extent. (2) When fiscal policy and financial policy are combined, the effect on technological innovation is higher, and meanwhile the effect of fiscal policy on technological innovation is greater than that of financial policy. (3) The intensity of policy also has an impact and there are threshold characteristics, which means only when the policy intensity break through a certain critical value will the policy be truly effective. (4) Only when the scale of the enterprise and the performance of the enterprise are within a certain range, the implementation effect of the policy is optimal. Meanwhile, there is no threshold effect of the solvency of enterprises, but the solvency of enterprises is negatively related to the effect of fiscal policy. The worse the solvency of enterprises, the worse the policy effect. Theoretically, this study completes current research by introducing financial policy into the relationship between the relationship of fiscal policy and technological innovation and considering their complementary effect. Meanwhile, non-linear relationships, as well as the state- and enterprise level impacting factors of policy implementation are further explored. Practically, results of this study point out the factors that the policy-makers should pay attention to in order to promote innovation, such as the policy intensity, enterprise scale and performance.
Original languageEnglish
Publication date2019
Publication statusAccepted/In press - 2019

Fingerprint

Threshold effects
Empirical study
Fiscal policy
Technological innovation
Industry
Wind power
Financial policy
Policy innovation
Solvency
Factors
Nonlinear relationships
Government subsidies
Technology innovation
Innovation
Game theory
Bank credit
Critical value
Policy implementation
Politicians
Entropy

Keywords

  • fiscal policy
  • financial policy
  • technological innovation
  • threshold effect
  • China

Cite this

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title = "The Threshold effect of fiscal and financial Policies on Technological Innovation- an empirical study of Chinese Wind Power Industry",
abstract = "Previous studies focused on the relationship between fiscal policy and technological innovation from a linear perspective, and revealed that the government subsidies have an influence. However, few studies research on the relationship between financial policy and technology innovation, and investigate whether there is a nonlinear relationship between the policy and technological innovation. We also have limited knowledge about the impacting factors. These represent the focuses of this study. Based on the entropy weight method and game theory modeling, this paper concludes: (1) there is a threshold effect among fiscal policy, financial policy and technology innovation of wind power industry, and there is an optimal interval. Only the government subsidy or the amount of bank credit in a certain range can the innovation of the wind power industry to be promoted to a maximum extent. (2) When fiscal policy and financial policy are combined, the effect on technological innovation is higher, and meanwhile the effect of fiscal policy on technological innovation is greater than that of financial policy. (3) The intensity of policy also has an impact and there are threshold characteristics, which means only when the policy intensity break through a certain critical value will the policy be truly effective. (4) Only when the scale of the enterprise and the performance of the enterprise are within a certain range, the implementation effect of the policy is optimal. Meanwhile, there is no threshold effect of the solvency of enterprises, but the solvency of enterprises is negatively related to the effect of fiscal policy. The worse the solvency of enterprises, the worse the policy effect. Theoretically, this study completes current research by introducing financial policy into the relationship between the relationship of fiscal policy and technological innovation and considering their complementary effect. Meanwhile, non-linear relationships, as well as the state- and enterprise level impacting factors of policy implementation are further explored. Practically, results of this study point out the factors that the policy-makers should pay attention to in order to promote innovation, such as the policy intensity, enterprise scale and performance.",
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The Threshold effect of fiscal and financial Policies on Technological Innovation- an empirical study of Chinese Wind Power Industry. / Wang, Daojuan; Gao, Wei; Fang, Liyu.

2019.

Research output: Contribution to conference without publisher/journalConference abstract for conferenceResearchpeer-review

TY - ABST

T1 - The Threshold effect of fiscal and financial Policies on Technological Innovation- an empirical study of Chinese Wind Power Industry

AU - Wang, Daojuan

AU - Gao, Wei

AU - Fang, Liyu

PY - 2019

Y1 - 2019

N2 - Previous studies focused on the relationship between fiscal policy and technological innovation from a linear perspective, and revealed that the government subsidies have an influence. However, few studies research on the relationship between financial policy and technology innovation, and investigate whether there is a nonlinear relationship between the policy and technological innovation. We also have limited knowledge about the impacting factors. These represent the focuses of this study. Based on the entropy weight method and game theory modeling, this paper concludes: (1) there is a threshold effect among fiscal policy, financial policy and technology innovation of wind power industry, and there is an optimal interval. Only the government subsidy or the amount of bank credit in a certain range can the innovation of the wind power industry to be promoted to a maximum extent. (2) When fiscal policy and financial policy are combined, the effect on technological innovation is higher, and meanwhile the effect of fiscal policy on technological innovation is greater than that of financial policy. (3) The intensity of policy also has an impact and there are threshold characteristics, which means only when the policy intensity break through a certain critical value will the policy be truly effective. (4) Only when the scale of the enterprise and the performance of the enterprise are within a certain range, the implementation effect of the policy is optimal. Meanwhile, there is no threshold effect of the solvency of enterprises, but the solvency of enterprises is negatively related to the effect of fiscal policy. The worse the solvency of enterprises, the worse the policy effect. Theoretically, this study completes current research by introducing financial policy into the relationship between the relationship of fiscal policy and technological innovation and considering their complementary effect. Meanwhile, non-linear relationships, as well as the state- and enterprise level impacting factors of policy implementation are further explored. Practically, results of this study point out the factors that the policy-makers should pay attention to in order to promote innovation, such as the policy intensity, enterprise scale and performance.

AB - Previous studies focused on the relationship between fiscal policy and technological innovation from a linear perspective, and revealed that the government subsidies have an influence. However, few studies research on the relationship between financial policy and technology innovation, and investigate whether there is a nonlinear relationship between the policy and technological innovation. We also have limited knowledge about the impacting factors. These represent the focuses of this study. Based on the entropy weight method and game theory modeling, this paper concludes: (1) there is a threshold effect among fiscal policy, financial policy and technology innovation of wind power industry, and there is an optimal interval. Only the government subsidy or the amount of bank credit in a certain range can the innovation of the wind power industry to be promoted to a maximum extent. (2) When fiscal policy and financial policy are combined, the effect on technological innovation is higher, and meanwhile the effect of fiscal policy on technological innovation is greater than that of financial policy. (3) The intensity of policy also has an impact and there are threshold characteristics, which means only when the policy intensity break through a certain critical value will the policy be truly effective. (4) Only when the scale of the enterprise and the performance of the enterprise are within a certain range, the implementation effect of the policy is optimal. Meanwhile, there is no threshold effect of the solvency of enterprises, but the solvency of enterprises is negatively related to the effect of fiscal policy. The worse the solvency of enterprises, the worse the policy effect. Theoretically, this study completes current research by introducing financial policy into the relationship between the relationship of fiscal policy and technological innovation and considering their complementary effect. Meanwhile, non-linear relationships, as well as the state- and enterprise level impacting factors of policy implementation are further explored. Practically, results of this study point out the factors that the policy-makers should pay attention to in order to promote innovation, such as the policy intensity, enterprise scale and performance.

KW - fiscal policy

KW - financial policy

KW - technological innovation

KW - threshold effect

KW - China

M3 - Conference abstract for conference

ER -