Abstract A sample of A-share non-financial listed enterprises from 2011 to 2020 is selected to empirically investigate the impact of local government subsidies on enterprises’ R&D investment. The study finds that local government subsidies are an essential driver of R&D investment， however， the resulting positive and negative economic consequences of subsidies in some enterprises lead to a dual effect， i.e.， local government subsidies trigger the “infection” effect of zombies in some enterprises and inhibit R&D investment at the same time. This results in an inverted U-shaped relationship between local government subsidies and enterprise R&D investment. The heterogeneity studies find that the above relationship is significantly different from enterprises with different financial characteristics. To make local government subsidies more effective in stimulating enterprises’ R&D enthusiasm， we should reduce information asymmetry between government and enterprises， strengthen the process supervision of R&D activities， establish a special performance evaluation system and selection mechanism for R&D activities of regional enterprises， and coordinate and promote “de-capacity” and “decentralization” to reduce the over-reliance of some enterprises on government subsidies， so as to gradually remove the policy burden borne by zombie enterprises and eliminate their rent-seeking incentives.
GUO Ke,GUO Xue-meng,ZHOU Yu-hao. Duality of Local Government Subsidies and Corporate R&D Investment ——Empirical Evidence Based on A-Share Listed Enterprises[J]. journal6, 2022, 21(4): 113-123.
2022, Vol. 21 
