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Article: When and Where Does Government-Subsidized R&D Work? Evidence from China

TitleWhen and Where Does Government-Subsidized R&D Work? Evidence from China
Authors
KeywordsGovernment R&D program
Productivity
Project screening
Marketization
Issue Date2014
PublisherSocial Science Electronic Publishing, Inc..
Citation
Social Science Research Network, 2014 How to Cite?
AbstractThis study examines the effects of government-subsidized R&D program by looking at both the influences of projects screening system and market conditions. Based on a panel dataset of Chinese manufacturing firms, we find that Innofund (one of the largest Chinese government programs supporting corporate R&D activities) generally chooses firms with higher productivity. Moreover, Innofund-backed firms experience significantly magnified productivity improvements compared to their non-Innofund-backed counterparts. However, the ex-ante project selection effects and the ex-post effects of Innofund vary according to the project screening policy change and differ across markets. The project screening system became substantially more decentralized after 2005 due to exogenous policy change by then. We find Innofund tended to be more risk-adverse by choosing firms with higher productivity at the time of project selection before 2005 than that of after 2005. However, we observe higher ex-post effects of Innofund after 2005. Finally, Innofund has stronger effects in less market-oriented provinces. Identification problems are handled using the propensity score matching approach and the instrumental variable approach.
Persistent Identifierhttp://hdl.handle.net/10722/210368
SSRN

 

DC FieldValueLanguage
dc.contributor.authorGuo, D-
dc.contributor.authorGuo, Y-
dc.contributor.authorJiang, K-
dc.date.accessioned2015-06-10T04:39:28Z-
dc.date.available2015-06-10T04:39:28Z-
dc.date.issued2014-
dc.identifier.citationSocial Science Research Network, 2014-
dc.identifier.urihttp://hdl.handle.net/10722/210368-
dc.description.abstractThis study examines the effects of government-subsidized R&D program by looking at both the influences of projects screening system and market conditions. Based on a panel dataset of Chinese manufacturing firms, we find that Innofund (one of the largest Chinese government programs supporting corporate R&D activities) generally chooses firms with higher productivity. Moreover, Innofund-backed firms experience significantly magnified productivity improvements compared to their non-Innofund-backed counterparts. However, the ex-ante project selection effects and the ex-post effects of Innofund vary according to the project screening policy change and differ across markets. The project screening system became substantially more decentralized after 2005 due to exogenous policy change by then. We find Innofund tended to be more risk-adverse by choosing firms with higher productivity at the time of project selection before 2005 than that of after 2005. However, we observe higher ex-post effects of Innofund after 2005. Finally, Innofund has stronger effects in less market-oriented provinces. Identification problems are handled using the propensity score matching approach and the instrumental variable approach.-
dc.languageeng-
dc.publisherSocial Science Electronic Publishing, Inc..-
dc.relation.ispartofSocial Science Research Network-
dc.rights© 2011 Social Science Electronic Publishing, Inc. All Rights Reserved. For personal & noncommercial use apply only to specific documents and use of specific SSRN-provided statistics and other information.-
dc.subjectGovernment R&D program-
dc.subjectProductivity-
dc.subjectProject screening-
dc.subjectMarketization-
dc.titleWhen and Where Does Government-Subsidized R&D Work? Evidence from China-
dc.typeArticle-
dc.identifier.emailGuo, D: diguo@hku.hk-
dc.identifier.emailJiang, K: jiangkun@hku.hk-
dc.identifier.authorityGuo, D=rp01065-
dc.identifier.authorityJiang, K=rp01520-
dc.description.naturelink_to_OA_fulltext-
dc.identifier.doi10.2139/ssrn.2459298-
dc.publisher.placeUnited states-
dc.identifier.ssrn2459298-

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