This paper studies the effect of government
research and development (R&D) subsidies and political relations on the innovative
activities of technological small and medium-sized enterprises (SMEs).
Moreover, the technology innovation path of SMEs is an important issue related
to government R&D subsidies. This paper explores these effects using multiple
case studies. Through case analyses of four biological pharmaceutical
enterprises, we found that first, technological SMEs that receive a significant amount of government
R&D subsidies will transform from exploitative innovation to explorative
innovation in a short amount of time, whereas technological SMEs that receive less
government R&D subsidies will perform less innovative activities over a
long time. Second, technological SMEs with strong political relations tend to
do more explorative innovation, whereas technological SMEs with weak political
relations tend to do more exploitative innovation. Third, technological SMEs with
strong political relations will promote the positive effect of government
R&D subsidies on their innovation performance.