This paper selects the data of non-financial listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange from 2007 to 2015, and studies the impact of government R&D subsidies on technological innovation of enterprises, then draws the following main conclusions: First, appropriate government subsidies can indeed promote enterprises’ technological innovation investment and output, but excessive government subsidies may have the opposite effect; second, there is a considerable amount of waste of resources in state-owned enterprises, and the problems of local state-owned enterprises are more complicated; the information asymmetry between the government and private enterprises may lead to serious “seeking support” behaviors in the process of applying for government subsidies. Based on this, this paper gives the following two policy recommendations: First, accelerate the governance reform of state-owned enterprises, especially for local state-owned enterprises, it is necessary to strictly control the process, to achieve the refinement of indicators, not only to see the results without looking at efficiency; second, efforts should be made to improve the relationship between private enterprises and the government, weaken the information asymmetry between each other, and ensure the effective allocation of resources.