The Effect of Subsidies on Cultural and Creative Enterprise Performance: Mediating Role of Patents

Cultural and creative industries are located at the intersection of art, commerce and science and technology. Therefore, it has become an important industry of a country. Some governments have formulated supportive policies to promote the cultural and creative industries. Subsidy is among the important policy instruments. It is of utmost importance to study the impact of subsidy on innovation and financial performance of cultural and creative enterprises. This paper attempts to examine how subsidy can facilitate innovation and financial performance of cultural and creative enterprises, and compare the mediating role of patent quantity and patent quality between subsidies and financial performance. Based on the panel data of 141 listed cultural and creative enterprises from 2008 to 2017 in China, this paper conducts an empirical study and finds that subsidies promote the financial performance of cultural and creative enterprises. The promotion effect of subsidies on patent quantity is greater than on patent quality, and the effect of patent quality on performance is greater than that of patent quantity. Patents play a mediating role between subsidies and financial performance, but the mediating effect of patent quality is not greater than that of patent quantity. The findings make several theoretical contributions and policy implications.