The impact of SRDI policy for SMEs on corporate innovation under the COVID-19: evidence from China

This study focuses on small and medium-sized enterprises (SMEs) in China, and examines whether and how the SRDI (Specialized, Refinement, Differential and Innovation) policy support impacts SMEs' innovation under the COVID-19. We find that the R&D investment and innovation outputs in SMEs supported by the SRDI policy gets significantly increased, which results from the increase in government subsidies and the implementation of digital transformation. Furthermore, the positive impact of the policy on SMEs' innovation is more significant after the outbreak of the COVID-19. It shows that resource support from government and digital transformation can help reduce the external adverse impact of the COVID-19 on SMEs' innovation and enhance the risk-taking and sustainable development capabilities of SMEs when the Black Swan incident occurs.