Differential impact of subsidised and nonsubsidized policies on the innovation of new energy vehicle enterprises: evidence from China

There are many controversies about the actual effect of China's new energy vehicle (NEV) industry policy in promoting the innovation of NEV enterprises. This study classifies China's NEV industry policies into two categories, subsidised policy and nonsubsidized policy, and divides the innovation behaviour of NEV enterprises into high- and low-quality innovation. We selected the data from 2010 to 2019 to analyze the impacts of the abovementioned policies on the two innovations, the differences during the various development stages of the industry, and the moderating effect of the political connections of NEV enterprises. The results demonstrated that the promoting effect of subsidised policy on innovation increased at first and then decreased, and the policy is more likely to cause enterprises to prefer low-quality innovation. The promoting effect of nonsubsidized policy on innovation gradually increases, and the policy has a greater impact on high-quality innovation. Further analysis revealed that the political connections positively moderate the influence of subsidised policy on low-quality innovation, but negatively moderate the influence of nonsubsidized policy on high-quality innovation.