Abstract: Promoting specialized, sophisticated, differentiated, and innovative small and medium-sized enterprises (SMEs) to achieve innovative breakthroughs in core technologies is an important lever for realizing scientific and technological self-reliance and strengthening original innovation capabilities. Adopting the perspective of the new-type government-business relationship, this study employs patent data covering nearly 210,000 specialized, sophisticated, differentiated, and innovative SMEs from 2017 to 2022 to examine the impact of new-type government-business relationship building on firms’ innovation in core technologies. The findings are as follows. First, the building of a new-type government-business relationship promotes enterprises’ innovation in core technologies. Second, mechanism analysis shows that the new-type relationship effectively plays the role of the “helping hand”, enhancing the core technological innovation capacity through three channels: providing special innovation subsidies, facilitating knowledge spillovers, and intensifying market competition. Third, heterogeneity analysis reveals that the innovation-driving effect of the new-type relationship is more pronounced for those enterprises located farther from municipal government office locations and those with higher levels of digitalization. The conclusions confirm that building a new-type government-business relationship can well stimulate the innovation vitality of specialized, sophisticated, differentiated, and innovative SMEs in core technologies. The government therefore should, with digital means, break geographical constraints and provide targeted innovation support , so as to achieve high-level scientific and technological self-reliance and self-strengthening for enterprises.

Key words: new-type government-business relationship, specialized, sophisticated, differentiated, and innovative SMEs, innovation in core technologies