The impact of public policy on enterprise innovation performance: Panel data on financial subsidy policy.

This study examined the impact of government subsidies on enterprise innovation performance in China. The fixed effects model was used for empirical analysis, utilizing panel data from 17,670 observations of 3703 listed A-share companies between 2012 and 2022, and the findings indicate that government subsidies significantly enhance enterprise innovation performance, with R&D investment serving as a partial mediator. The enterprise scale, ownership nature, and regional economic differences influenced the effectiveness of the subsidy. Larger enterprises benefit more than SMEs; non-state-owned enterprises show stronger innovation incentives and the incentive effects are more pronounced in the central and western regions than in the eastern regions. This study recommends increasing government subsidies, particularly for SMEs in the central and western regions, by optimizing subsidy methods, enhancing targeting, and refining subsidy evaluation mechanisms. Therefore, enterprise managers should focus on strategic planning and continuous innovation to drive sustainable economic development. This study contributes to the theoretical understanding of subsidy policy impacts and offers practical policy insights for enhancing innovation performance in enterprises.