IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v185y2024ics0148296324004120.html
   My bibliography  Save this article

More is less: The dual role of government subsidy in firms’ new product development

Author

Listed:
  • Liu, Zixu
  • Zhou, Jianghua
  • Li, Jizhen
  • Ma, Xufei

Abstract

This study focuses on “the paradox of government support,” and examines the direct, moderating, and contingent effects of government subsidies on new product development (NPD). Drawing on the resource management perspective, we argue that subsidies lead to both learning effects and inefficiency problems. Different subsidy levels make these two conflicting effects more or less salient. Consequently, subsidies and firms’ NPD have an inverted U-shaped relationship. Moreover, subsidies negatively (positively) moderate the relationship between a firm’s internal (external) R&D investments and NPD, which is further strengthened (weakened) by state ownership. An empirical analysis of panel data on Chinese high-growth firms strongly supports our hypotheses. We discuss the implications for the resource management perspective and NPD research, high-tech industry practitioners, and policymakers in emerging economies.

Suggested Citation

  • Liu, Zixu & Zhou, Jianghua & Li, Jizhen & Ma, Xufei, 2024. "More is less: The dual role of government subsidy in firms’ new product development," Journal of Business Research, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:jbrese:v:185:y:2024:i:c:s0148296324004120
    DOI: 10.1016/j.jbusres.2024.114908
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296324004120
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2024.114908?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:185:y:2024:i:c:s0148296324004120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.