Abstract: Based on the Stochastic Frontier Production Function, impact of government subsidies on innovation efficiency is studied in terms of the panel data of China’s new energy listed companies from 2007 to 2017 The results show that the innovation efficiency of China’s new energy enterprises has been increasing in recent years, but the level is still low and the development is unbalanced among industries Financial subsidies and tax incentives adopted by government both can improve the innovation efficiency, but there is short-term failure on tax incentives and long-term failure on financial subsides Additionally, the ownership nature, internal R&D investment and scale of new energy enterprises will affect the utilization of government subsidies, and further affect the improvement of innovation efficiency of new energy enterprises

Key words: financial subsidies, tax incentives, innovation efficiency