Taking 2016-2020 new generation information technology listed companies as a sample, this paper empirically tests the incentive effect of government subsidies on technological innovation of new generation information technology listed companies and its mechanism. The results show that: government subsidies have a technological innovation input effect and technological innovation output effect, and ex post facto subsidies are more capable of stimulating high-quality technological innovation output; government subsidies promote technological innovation inputs by easing financing constraints and increase technological innovation outputs by promoting collaborative R&D. Extended research shows that the stronger the knowledge absorption ability of listed companies, the more significant the promotion effect of government subsidies on the willingness of listed companies to cooperate in R&D, the quantity and quality of cooperative R&D; the more abundant the resources of colleges and universities in the provinces where listed companies are located, and the more innovative industrial clusters are located in the places where listed companies are located, the more significant the promotion effect of government subsidies on the quantity and quality of cooperative R&D of listed companies. Based on the empirical findings, countermeasure suggestions for optimizing and effectively using government subsidy policy to promote technological innovation of new generation information technology listed companies are proposed.