Abstract: Based on the event of local government launching fund-guiding policies from 2008 to 2018 and the corresponding large sample data of firm innovations, a difference-in-difference model of the quasi-natural experiment is constructed to examine the actualization of the long-term innovation-driven goal of the fund-guiding policies. It is found that local government’s fund-guiding policies play a role of supportive hand in enriching firm innovation, as evidenced by the synergy effect generated by the complementation between the fund-guiding policies and traditional public financial policies like tax preference and government subsidy, and resource availability provided by the fund-guiding policies to improve firms’ asset turnover efficiency and relieve the resource constraints on firms. The innovation enrichment effect of fund-guiding policies is mainly applicable to non-state-owned firms, the manufacturing sector, and in the cities with a lower marketization index.

Key words: government’s fund-guiding policies, firm innovation, difference-in-difference model