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Are government financial subsidies the main motivators in firms' innovative activities? By exploring the corporate response behavior to innovation policies issued by central, provincial, municipal and district/county levels of government in China, this paper find that firms' responses are motivated more by the attractiveness of status resources than by financial subsidies, and activated by the pressure of the competitive mechanism imbedded in the government policy system. Based on firms' understanding of government policies, firms choose either an opportunistic or a proactive strategy. They may choose alternative actions such as setting up government affairs departments to interact with government in the process of policy formulation and implementation, or applying for policy project to obtain policy resources. Above corporate response behaviors differ among firms in terms of firms' growth stages and the innovation policies' hierarchical level. Our findings enhance the mechanism of the government innovation policy in China, which makes the firms grow. [ABSTRACT FROM AUTHOR]