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Governance and effects of public R&D subsidies: Evidence from China

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  • Guo, Di
  • Guo, Yan
  • Jiang, Kun

Abstract

This study examines the effects of public research and development (R&D) subsidies and the governance of such subsidies on firm productivity based on the analysis of a firm-level panel dataset between 1998 and 2007 in China. It is found that public R&D subsidies tend to support more productive firms and the productivity of these government-backed firms is improved further after they get the government support. Less attention is paid to the observable or measurable performance measurements in ex-ante project selection, and the ex-post effects are stronger when the governance of the public R&D subsidies becomes more decentralized due to an exogenous policy change. In other words, better decentralization of governance is associated with more pronounced effects of R&D subsidies. Identification concerns are addressed with various approaches to confirm the treatment effect of public R&D subsidies and the governance of such subsidies.

Suggested Citation

  • Guo, Di & Guo, Yan & Jiang, Kun, 2018. "Governance and effects of public R&D subsidies: Evidence from China," Technovation, Elsevier, vol. 74, pages 18-31.
    • Handle: RePEc:eee:techno:v:74-75:y:2018:i::p:18-31
    DOI: 10.1016/j.technovation.2018.04.001
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    More about this item

    Keywords

    Public R&D subsidies; Productivity; Governance; Decentralization; China;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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