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The Impact of Government Subsidies on Technological Innovation in Agribusiness: The Case for China

Author

Listed:
  • Liping Wu

    (College of Economics and Management, Jiangxi Agricultural University, Nanchang 310045, China)

  • Kai Hu

    (College of Economics and Management, Jiangxi Agricultural University, Nanchang 310045, China)

  • Oleksii Lyulyov

    (Department of Management, Faculty of Applied Sciences, WSB University, 41-300 Dabrowa Gornicza, Poland
    Department of Marketing, Sumy State University, 40007 Sumy, Ukraine)

  • Tetyana Pimonenko

    (Department of Management, Faculty of Applied Sciences, WSB University, 41-300 Dabrowa Gornicza, Poland
    Department of Marketing, Sumy State University, 40007 Sumy, Ukraine)

  • Ishfaq Hamid

    (MICA, The School of Ideas, Ahmedabad 380058, India)

Abstract

With the implementation of the rural revitalization strategy and the promotion of agricultural and rural modernization, the subsidies enjoyed by agricultural enterprises in China are increasing. As a result, the effectiveness of government subsidies for the technological innovation of agricultural enterprises has attracted more and more attention. Based on the perspectives of the whole industry chain of agriculture, forestry, animal husbandry, fisheries, and of processing, manufacturing, circulation, and service, this paper takes the listed agricultural companies from 2007 to 2019 as a research sample and empirically tests the effects and mechanisms of government subsidies on the technological innovation of agricultural enterprises. The study applies the fixed effect and intermediary effect models. The findings show that government subsidies potentially encourage agricultural enterprises to grow more successfully. Moreover, R&D expenditure is essential for enterprise technological innovation and leads to an intermediate impact. At the same time, government subsidies for the technological innovation of agricultural enterprises have a certain heterogeneity between different industries, state-owned enterprises and non-state-owned enterprises, and large enterprises and small and medium-sized enterprises. Therefore, this study argues that the government should continue to raise subsidies. In addition, the subsidies should be “different from enterprise to enterprise”, and government subsidy funds should be better supervised to foster agricultural technological innovation properly.

Suggested Citation

  • Liping Wu & Kai Hu & Oleksii Lyulyov & Tetyana Pimonenko & Ishfaq Hamid, 2022. "The Impact of Government Subsidies on Technological Innovation in Agribusiness: The Case for China," Sustainability, MDPI, vol. 14(21), pages 1-15, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:14003-:d:955424
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