IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v12y2022i5p709-d817829.html
   My bibliography  Save this article

Impact of Government Policies on Research and Development (R&D) Investment, Innovation, and Productivity: Evidence from Pesticide Firms in China

Author

Listed:
  • Ruifa Hu

    (School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China
    Yangtze Delta Region Academy, Beijing Institute of Technology, Jiaxing 314019, China)

  • Changxin Yu

    (School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China)

  • Yanhong Jin

    (School of Environmental and Biological Sciences, Rutgers, The State University of New Jersey, New Brunswick, NJ 08901, USA)

  • Carl Pray

    (School of Environmental and Biological Sciences, Rutgers, The State University of New Jersey, New Brunswick, NJ 08901, USA)

  • Haiyan Deng

    (School of Humanities and Social Sciences, Beijing Institute of Technology, Beijing 100081, China)

Abstract

China’s pesticide industry has played an important role in the growth of agricultural productivity in both China and worldwide, but its development is hampered by production inefficiency and the lack of innovation of active ingredients. To improve innovation and the productivity of the pesticide industry, the Chinese government has implemented a series of policies to stimulate private research and development (R&D) and firm innovation. Using the firm-level panel data of the Annual Survey of Industrial Firms (ASIF) collected by the National Bureau of Statistics in 2001–2007, this study examines the linkages between R&D investment, innovation, and productivity with a focus on the role of government policies. The results show that pesticide firms with a higher intensity of R&D investment were associated with a higher patent intensity, and more innovated firms were associated with a higher productivity. Public research, intellectual property enforcement, production subsidy, foreign direct investment (FDI), and being export oriented were positively associated with the innovation and productivity of pesticide firms.

Suggested Citation

  • Ruifa Hu & Changxin Yu & Yanhong Jin & Carl Pray & Haiyan Deng, 2022. "Impact of Government Policies on Research and Development (R&D) Investment, Innovation, and Productivity: Evidence from Pesticide Firms in China," Agriculture, MDPI, vol. 12(5), pages 1-16, May.
    • Handle: RePEc:gam:jagris:v:12:y:2022:i:5:p:709-:d:817829
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/12/5/709/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/12/5/709/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jose Miguel Benavente, 2006. "The role of research and innovation in promoting productivity in chile," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 301-315.
    2. Howell, Anthony, 2016. "Firm R&D, innovation and easing financial constraints in China: Does corporate tax reform matter?," Research Policy, Elsevier, vol. 45(10), pages 1996-2007.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    4. Ann E. Harrison & Inessa Love & Margaret S. McMillan, 2022. "Global capital flows and financing constraints," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 8, pages 181-213, World Scientific Publishing Co. Pte. Ltd..
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    6. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    7. Fan, C. Simon & Hu, Yifan, 2007. "Foreign direct investment and indigenous technological efforts: Evidence from China," Economics Letters, Elsevier, vol. 96(2), pages 253-258, August.
    8. Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation and Productivity: Evidence from Six Latin American Countries," World Development, Elsevier, vol. 40(2), pages 273-290.
    9. Guanming Shi & Carl Pray, 2012. "Modeling agricultural innovation in a rapidly developing country: the case of Chinese pesticide industry," Agricultural Economics, International Association of Agricultural Economists, vol. 43(4), pages 379-390, July.
    10. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    11. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    12. Pritt Vahter, 2006. "An Econometric Study of Estonia and Slovenia: The Effect of FDI on Labour Productivity," Studies in Economic Transition, in: Johannes Stephan (ed.), Technology Transfer via Foreign Direct Investment in Central and Eastern Europe, chapter 6, pages 96-125, Palgrave Macmillan.
    13. Anthony Howell, 2020. "Industry relatedness, FDI liberalization and the indigenous innovation process in China," Regional Studies, Taylor & Francis Journals, vol. 54(2), pages 229-243, February.
    14. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66(5), pages 419-419.
    15. Defever, Fabrice & Riaño, Alejandro, 2017. "Subsidies with export share requirements in China," Journal of Development Economics, Elsevier, vol. 126(C), pages 33-51.
    16. Howell, Anthony, 2017. "Picking ‘winners' in China: Do subsidies matter for indigenous innovation and firm productivity?," China Economic Review, Elsevier, vol. 44(C), pages 154-165.
    17. Fuglie, Keith & Clancy, Matthew & Heisey, Paul & Macdonald, James, 2017. "Research, Productivity, And Output Growth In U.S. Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(4), pages 514-554, November.
    18. Pakes, Ariel & Griliches, Zvi, 1980. "Patents and R&D at the firm level: A first report," Economics Letters, Elsevier, vol. 5(4), pages 377-381.
    19. Nee, Victor & Opper, Sonja, 2012. "Capitalism from Below: Markets and Institutional Change in China," Economics Books, Harvard University Press, number 9780674050204, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin Zhu & Brychko Alina, 2023. "Bibliometric Analysis of Research Hotspots and Trends in the Transformation and Development of Agricultural Enterprises," Management Theory and Studies for Rural Business and Infrastructure Development, Sciendo, vol. 45(4), pages 438-452, December.
    2. Bobola Agnieszka & Ozimek Irena & Pomianek Iwona & Rakowska Joanna, 2022. "Selected Aspects of Innovative Activity of Polish Enterprises in 2016–2020," Marketing of Scientific and Research Organizations, Sciendo, vol. 45(3), pages 71-96, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Howell, Anthony, 2017. "Picking ‘winners' in China: Do subsidies matter for indigenous innovation and firm productivity?," China Economic Review, Elsevier, vol. 44(C), pages 154-165.
    2. Edeh, Jude N. & Acedo, Francisco J., 2021. "External supports, innovation efforts and productivity: Estimation of a CDM model for small firms in developing countries," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    3. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    4. Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation and Productivity: Evidence from Six Latin American Countries," World Development, Elsevier, vol. 40(2), pages 273-290.
    5. Mario D. Tello, 2015. "Firms' Innovation, Public Financial Support, and Total Factor Productivity: The Case of Manufactures in Peru," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 358-374, May.
    6. Seenaiah Kale & Badri Narayan Rath, 2018. "Does Innovation Enhance Productivity In Case Of Selected Indian Manufacturing Firms?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1225-1250, November.
    7. Messaoud Zouikri & Mounir Amdaoud, 2018. "Compétences externes et innovation: le cas des firmes de l'industrie manufacturière algérienne," EconomiX Working Papers 2018-37, University of Paris Nanterre, EconomiX.
    8. Fedyunina, Anna & Radosevic, Slavo, 2022. "The relationship between R&D, innovation and productivity in emerging economies: CDM model and alternatives," Economic Systems, Elsevier, vol. 46(3).
    9. Wadho, Waqar & Chaudhry, Azam, 2022. "Innovation strategies and productivity growth in developing countries: Firm-level evidence from Pakistani manufacturers," Journal of Asian Economics, Elsevier, vol. 81(C).
    10. Adel Ben Khalifa, 2023. "Impact of research and development (R&D) and information, and communication technology (ICT) on innovation and productivity evidence from Tunisian manufacturing firms," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 341-361, April.
    11. Amy Kahn & Moses Sithole & Yasser Buchana, 2022. "An analysis of the impact of technological innovation on productivity in South African manufacturing firms using direct measures of innovation," South African Journal of Economics, Economic Society of South Africa, vol. 90(1), pages 37-56, March.
    12. Xiaoyong Dai & Liwei Cheng, 2018. "The impact of product innovation on firm-level markup and productivity: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 50(42), pages 4570-4581, September.
    13. Waheed, Abdul, 2011. "Innovation and firm-level productivity: econometric evidence from Bangladesh and Pakistan," MERIT Working Papers 2011-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Abdul Waheed, 2017. "Innovation and Firm-Level Productivity: Evidence from Bangladesh," The Developing Economies, Institute of Developing Economies, vol. 55(4), pages 290-314, December.
    15. Berulava, George & Gogokhia, Teimuraz, 2016. "Studying Complementarities between Modes of Innovation Strategies in Transition Economies," MPRA Paper 71277, University Library of Munich, Germany.
    16. Howell, Anthony, 2018. "Innovation and Firm Performance in the People’s Republic of China: A Structural Approach with Spillovers," ADBI Working Papers 805, Asian Development Bank Institute.
    17. Busom, Isabel & Vélez-Ospina, Jorge Andrés, 2017. "Innovation, Public Support, and Productivity in Colombia. A Cross-industry Comparison," World Development, Elsevier, vol. 99(C), pages 75-94.
    18. Beom Cheol Cin & Young Jun Kim & Nicholas S. Vonortas, 2017. "The impact of public R&D subsidy on small firm productivity: evidence from Korean SMEs," Small Business Economics, Springer, vol. 48(2), pages 345-360, February.
    19. Howell, Anthony, 2016. "Firm R&D, innovation and easing financial constraints in China: Does corporate tax reform matter?," Research Policy, Elsevier, vol. 45(10), pages 1996-2007.
    20. Jorge Antonio Rodríguez-Moreno & María Engracia Rochina-Barrachina, 2019. "ICT Use, Investments in R&D and Workers’ Training, Firms’ Productivity and Markups: The Case of Ecuadorian Manufacturing," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 1063-1106, September.

    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:gam:jagris:v:12:y:2022:i:5:p:709-:d:817829. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.