How R&D Subsidies Influence High-tech SMEs' Knowledge Creation through Universities

The study examines the effect of public research and development (R&D) subsidies on the knowledge creation of high-tech small and medium-sized enterprises (SMEs) through universities. It also tests two mediating pathways: R&D collaboration with universities and the recruitment of highly educated human resources. We use exclusive panel data from a survey of high-tech firms in Jiangsu Province, China, spanning the years 2010 to 2014. Our findings reveal that R&D subsidies can promote high-tech SMEs' knowledge creation through universities, and we further find that recruiting highly educated R&D human resources has a partial mediating effect. When subsidized SMEs are located in science parks, the effects of R&D subsidies on SMEs' knowledge creation are strengthened. Our research contributes to innovation policy studies and innovation systems research. Several important policy implications are also derived from this study.