Do government subsidies promote efficiency in technological innovation of China's photovoltaic enterprises?

Supported by preferential policies and government funding, the technological innovation of China's photovoltaic industry has been improved greatly. As a capital-intensive practice, will innovation activities in China's photovoltaic industry be affected by the continuous decline of government subsidies in recent years? Therefore, it is essential to study the relationship between government subsidies and innovation performance of Chinese photovoltaic industry. However, there is less empirical research on this topic. In this context, this study aims to supplement existing studies by proposing a micro-level perspective to measure the innovation performance based on the data of Chinese listed photovoltaic companies from 2012 to 2016. Moreover, we assess the effects of government subsidies and other influencing factors on innovation performance. The findings reveal that, firstly, the average innovation efficiency of Chinese listed photovoltaic companies is over 0.9, which is relatively high. Secondly, government subsidies make a positive influence on innovation performance. Thirdly, financial leverage and ownership concentration have significant positive impacts, while firm size has a significant negative effect on the innovation efficiency of China's photovoltaic industry. The findings will serve as a reference for policy-making to promote further technological progress and sustainable development of China's photovoltaic industry. • This paper estimates the innovation performance of China's photovoltaic industry based on the micro perspective. • This paper conducts a comprehensive analysis by a two-stage DEA-Tobit model. • The overall innovation efficiency of Chinese photovoltaic enterprises is high relatively but still has progress potential. • Government subsidies make a positive influence on technological innovation efficiency of China's photovoltaic industry. • The findings will serve as a reference for policy-making of government and enterprises. [ABSTRACT FROM AUTHOR]