*3.2. Endogenous Test*

Considering the endogeneity problem of reverse causality may exist between government subsidies and the amount of technological innovation of enterprises, that is, the higher the level of the technological innovation of enterprises, the easier it is for them to meet the standards for granting subsidies and obtain more government subsidies. This study selected the mean value of government subsidies in the new energy vehicle industry

lagging behind the first phase and government subsidies lagging behind the second phase as instrumental variables for the two-stage least squares estimation [36]. Reasons for selecting tool variables are as follows. (1) When applying for government subsidies, enterprises are likely to refer to the subsidy amount applied by other enterprises in the same industry in the previous period to ensure that the maximum subsidy amount can be obtained on the basis of successful application; and (2) if the enterprise can obtain government support in the early stage, it may send a positive signal to the government, which is conducive to the enterprise applying again for government subsidies. Table 5 shows that government subsidies had a significant effect on the total number of patents, invention patents, and utility model patents at the 5% level. The impact of government subsidies on patent quality was still insignificant. These results are consistent with the benchmark regression results.



Note: z-statistics are given in parentheses \* *p* < 0.1, \*\* *p* < 0.05, \*\*\* *p* < 0.01. CONTROLS includes capital structure (*lev*), profitability (*roa*), enterprise size (*size*), proportion of fixed assets (*ppe*), proportion of independent directors (*dir*), enterprise age (*age*), enterprise growth ability (*gov*), and human capital (*hc*).
