The pig seed industry is facing the problem of “necklace” and it is of positive significance to discuss the effect of the subsidy policy for improved pig varieties and the mechanism black box that affects the improvement of improved pig varieties. Applying the theoretical analysis and based on a balanced panel data of 30 provinces (cities, districts) from 2007 to 2016, this study empirically explores the influence of pig seed subsidies on pig seed industry by using multi-period double difference model and verifies the mechanism by using intermediary effect model and regulatory effect model. Results show that the subsidy policy for improved pig varieties can effectively alleviate the problem of “necklace” in pig seed industry, and the influence effect shows a dynamic trend of first rising and then falling. Mechanism analysis shows that the improved pig seed subsidy policy can improve the improved pig seed level by improving the technical service level and reducing the transaction cost of improved pig seed technology. In addition, the improved pig seed subsidy policy can reduce the negative impact of disease risk on the improved pig seed level. Heterogeneity analysis shows that the policy effect of pig improved variety subsidy policy is more obvious in areas with lower improved variety, higher pig slaughter scale and medium intensive scale. Therefore, this paper provides the following suggestions: continuing to promote the subsidy policy for improved pig seeds, optimizing the development environment of pig seed industry by taking various measures, and promoting improved seed technology according to local conditions.