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Government subsidies and innovation quality: The role of economic policy uncertainty and financial technology

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  • Liu, Jianwang
  • Xia, Weifeng

Abstract

Using data from Chinese listed companies between 2013 and 2022, this paper examines how government subsidies influence innovation quality. It also considers external shocks, particularly economic policy uncertainty (EPU) and financial technology (FINTECH). The results show that government subsidies significantly enhance both average and overall innovation quality. However, EPU weakens this positive effect, while FINTECH strengthens it. Robustness tests confirm the reliability of these findings. The study underscores the importance of increasing government subsidies, mitigating EPU, and advancing FINTECH development.

Suggested Citation

  • Liu, Jianwang & Xia, Weifeng, 2025. "Government subsidies and innovation quality: The role of economic policy uncertainty and financial technology," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009171
    DOI: 10.1016/j.frl.2025.107658
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