This paper investigates the impact of network infrastructure on digital entrepreneurship using panel data from 295 Chinese cities (2005—2020) and a multi-period difference-in-differences design, exploiting the rollout of the “Broadband China” strategy as a quasi-natural experiment. The policy increased the share of digital enterprises by 2.97 percentage points on average, indicating that better infrastructure fosters regional digital entrepreneurship. The effect is stronger for small and micro firms, and network improvements encouraged new entries even in markets dominated by large incumbents. Heterogeneity analysis shows greater effects in cities with more university students and in industries with higher digital intensity. Mechanism tests suggest that network infrastructure promotes digital entrepreneurship by enhancing coverage quality, enlarging digital markets, and lowering transaction costs.

The effect of government subsidies on innovation of small and medium-sized enterprises（SME）is still lack of empirical analysis. This paper estimates the impact of government subsidies on the innovation strategy and performance of SMEs. We use Listed SMEs as research samples and divide the government subsidies into R&D subsidies and non R&D subsidies. Following findings are obtained: first, R&D subsidies and non R&D subsidies significantly promote the R&D expenditure of SMEs, but the effect of R&D subsidies is significantly stronger; Second, R&D subsidies can promote the patent output of SMEs, mainly to significantly promote the number of invention patents of SMEs, while non R&D subsidies are more to promote other types of innovation; Third, from the perspective of innovation efficiency, R&D subsidies play a significant positive role in the technological progress of SMEs, but play a significant negative role in the pure technical efficiency of SMEs, while non R&D subsidies play a negative role in the technological progress, pure technical efficiency and total factor productivity. Heterogeneity analysis found that rent-seeking will distort the effect of Government R&D subsidies on the innovation; Government subsidies have a stronger incentive effect on non-high-tech SMEs; Government R&D subsidies have a better effect on the innovation activities of SMEs with better internal governance.