Government Subsidies and Enterprise Innovation in Chokepoint Technologies: Evidence from China’s Advanced Materials Sector

Luqi Liu; Jie Yu; Yajing Sun; Jiani Yan; Yijin Zhu; Rong Lu; Mingting Kou

doi:10.54097/6k915w37

Authors

Luqi Liu
Jie Yu
Yajing Sun
Jiani Yan
Yijin Zhu
Rong Lu
Mingting Kou

DOI:

https://doi.org/10.54097/6k915w37

Keywords:

Government Subsidy Policy; Chokepoint Technologies; Advanced Materials Industry; Identification Model for Chokepoint Technologies.

Abstract

Amid rising global tech competition and supply chain restructuring, advancing chokepoint technologies in the advanced materials sector is vital to China’s technological autonomy, yet micro-level evidence on the effectiveness of government subsidies in this domain remains limited. This study develops a two-stage identification model to capture firm-level chokepoint innovation activities, integrating patent complexity, strategic value, and international disadvantage. Using panel data on Chinese A-share listed firms in the advanced materials sector from 2013 to 2021, and employing a fixed effects model (FEM), we examine the direct impact and underlying mechanisms of government subsidies on chokepoint innovation. Our findings reveal that subsidies significantly enhance firm-level chokepoint innovation, partly mediated through increased R&D investment. Heterogeneity analyses further show that the effect is more pronounced in eastern and central regions and among non-state-owned enterprises, while firm lifecycle differences appear marginal. This study proposes a replicable methodology for identifying chokepoint technologies and provides micro-level evidence on the efficacy and boundary conditions of subsidy-driven innovation, offering actionable insights for the design of targeted innovation support policies in the advanced materials sector.

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