Research on the Impact of the Specialized, Refined, Unique, and Innovative “Little Giant” Policy on the Small and Medium Enterprises’ Innovation

Abstract

Using data from Chinese A-share listed companies and companies listed on the New Third Board from 2018 to 2022, this study evaluates the causal effect of the "Little Giant" policy on innovation in small and medium-sized enterprises through a staggered difference-in-difference model. Research has found that the "little giant" policy of specialization, refinement, and innovation has significantly promoted innovation in small and medium-sized enterprises. The robustness test found that the policy significantly promoted the level of innovation input and innovation output, with the innovation output level specifically manifested as a significant increase in the number of invention patents. Mechanism analysis confirms that the "Little Giant" policy of specialization, refinement, and innovation has significantly promoted enterprise innovation through three mechanisms: alleviating financing constraints, providing government subsidies, and promoting market competition. Heterogeneity analysis found that enterprises in key areas of policy implementation and those related to "bottleneck" technology are significantly more affected by the causal effect of the policy on promoting innovation.