How does government policy lead SMEs to engage in innovation
Within the past few years, Chinese small and medium-sized enterprises (SMEs) had exhibited remarkable innovation. These enterprises had leveraged cutting-edge technologies and creative strategies to achieve growth and success in the competitive global market. From advancements in AI and machine learning to breakthroughs in e-commerce and digital marketing, Chinese SMEs had shown a readiness to embrace innovation. The government had supported these efforts through financial subsidies and guiding policies. This study examines how financial subsidies and digital transformation, both backed by the government, impact innovation performance in SMEs, exploring the mechanism of these factors on enterprise innovation. In accordance with 1131 A-share listed SMEs in China between 2017 and 2022, in order to test theoretical hypotheses, this study utilizes multiple regression methods.