Can Innovation Attract Government-Guided Funds? — Empirical Evidence from Chinese A-Share Listed Companies

This study explores the relationship between corporate innovation and government-guided funds, using China’s A-share listed companies from 2016 to 2020 as research subjects. The research has found that the higher the level of corporate innovation, the greater the likelihood of investment from government-guided funds; this effect is especially prominent when the company belongs to a strategic emerging industry. Distinguishing between substantive and strategic innovation reveals that government-guided funds can effectively identify substantive innovation. Considering government-guided funds from different administrative levels, it was found that national-level government-guided funds can more accurately identify substantive and strategic innovations. In contrast, local government-guided funds, though capable of identifying substantive innovation, may be deceived by strategic innovation. Evidence indicates that, in the context of the current national innovation-driven development strategy, the government’s use of government-guided funds as a policy tool is effective to a certain degree. The findings of this paper not only enrich the existing literature on corporate innovation and government-guided funds but also offer policy insights from the perspective of active governance to further optimize and improve the management of government-guided funds.