Analysis on Effect of Public Expenditure in Incentive to Enterprises¡¯ Innovation Independently in Inner Mongolia

In recent years, the Ministry of Finance in China has successively formulated some fiscal policies and measures to stimulate technological innovation. With the scale of public expenditure increasing, government and the academic commonly focus on the issue that result of incentive to innovation. This paper firstly conducts an empirical test by using empirical data of Inner Mongolia Autonomous Region in order to find the relationship between public expenditure and innovation independently. Secondly the author estimates the optimal scale of R&D expenditure. Finally, the author proposes corresponding policy-suggestions according to the calculate results.