Government Subsidies and Enterprise Innovation: Moderation Effect of Absorbed Slack

Abstract

It is worth studying whether enterprises receiving government subsidies can transform them into innovative achievements under the constraints of enterprise resources. The data from the three industries of electronics, pharmaceuticals, and information technology during 2013-2016 were empirical tested to verify the moderating effect of the absorbed slack on the relationship between government subsidies and enterprise innovation. The results show that government subsidies can promote enterprise innovation; absorbed slack promotes enterprise innovation; the absorbed slack of enterprises plays a positive moderation role in the relationship between government subsidy and enterprise innovation. In other words, the enterprises with high absorbed slack can promote the innovation of enterprises by government subsidies. The conclusions provide theoretical guidance for government departments to select the most suitable enterprises which accept innovative subsidies.