Abstract: The paper builds the Cox proportional hazards model using the unbalanced panel date of 2315 enterprises that entering the strategic emerging industry from 2004 to 2010, which from the micro level, examines the effect of government subsidies and innovation ability on enterprise survival time, especially the mediating effect the innovation ability acts between the other two. The study found that government subsidies tend to have an inverted U-shape effect on enterprise survival time and, the effect varies by the ownership properties of enterprises; innovation ability can lower the risk of exit of firms and effectively prolong the enterprise survival time, which also, partly acting as a mediator between government subsidies and enterprise survival time. The conclusion offers a new explanation for the internal logic of enterprise survival time, which will be of great practical significance on the reasonable allocation of limit public financial resources and the sound development of strategic emerging industry.