Abstract: This paper examines the effects of governmental innovation intervention policies on efficiency of corporate innovation. The findings indicates that in general corporate innovation contributes to firm valuation, but the effect of government subsidies on value relevance of corporate innovation is significant only for firms located at regions with poor financial environment. Utilizing tax-cutting reforms at the beginning of 2009 as exogenous events, the paper finds that efficiency of corporate innovation is steadily increasing after tax cut reforms, which is not influenced by development of financial marketization. From the point of innovation financing, the paper compares the effects of government subsidies and tax cutting on efficiency of innovation and generates some meaningful policy implications.