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Investigating the Impact of Innovation Policies and Innovation Environment on Regional Innovation Capacity in China

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  • Chengzhao Li

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, China)

  • Zongjun Wang

    (School of Management, Huazhong University of Science and Technology, Wuhan 430074, China)

Abstract

Regional technological innovation serves as a key pillar for achieving high-level self-reliance and self-strengthening, a fundamental requirement for promoting balanced regional development, and a vital aspect of implementing the innovation-driven development strategy. We examine the impact of innovation policies on corporate innovation activities and the importance of the innovation environment in enhancing innovation capacity. By analyzing the implementation of innovation policies in three provinces in Central China from 2018 to 2022, this study introduces two indicators—policy intensity and policy volume—to assess the level of government policy support. The findings are as follows: First, local government innovation policies exert a significant positive impact on corporate innovation activities, with particularly strong effects observed in the implementation of R&D subsidies. Second, the implementation of regional innovation policies enhances regional innovation capacity by promoting increased R&D investment by firms. Third, the innovation environment moderates the influence of regional innovation policies on corporate R&D investment, amplifying the effect of R&D investment on regional innovation capacity. In summary, when formulating innovation policies, governments should consider the unique needs of different industries, regions, and enterprises, adopting flexible and diverse policy measures to optimize the innovation environment and accelerate the nation’s technological innovation development.

Suggested Citation

  • Chengzhao Li & Zongjun Wang, 2024. "Investigating the Impact of Innovation Policies and Innovation Environment on Regional Innovation Capacity in China," Sustainability, MDPI, vol. 16(23), pages 1-16, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10264-:d:1527779
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