Interplay of Government Support and Foreign Investment in Enhancing R&D in China’s Strategic Sectors

Abstract

This investigation explores the intricate relationship between government support, foreign investment, and research and development (R&D) commitment in China's strategic sectors, with a focus on the crucial role of government assistance in spurring innovation in small-scale enterprises. Utilizing advanced deep learning and data mining techniques, the impact of government subsidies and tax incentives on R&D dedication in burgeoning strategic firms is meticulously analyzed, particularly in the context of varying levels of external financing. The findings reveal a significant, multifaceted influence of government financial aid and foreign capital on R&D endeavors. A pronounced, positive correlation between government financial backing and R&D activities emerges, with the magnitude of this relationship being substantially modulated by the degree of external investment. This underscores the importance of strategic financial orchestration in nurturing research and innovation within pivotal sectors. Insights gleaned from this study are of paramount importance for policy formulators and business leaders, offering a refined comprehension of the synergistic interplay between government incentives, foreign investment, and R&D commitment. These findings are pivotal for promoting economic growth and technological progress in China's key industries.