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Do R&D Subsidies Improve Operational Performance? New evidence from China

Author

Listed:
  • Qingjie Zhou
  • Mingyue Du
  • Zhenling Chen
  • Tianshun Miao
  • Guoge Yang

Abstract

The sustainable development of the digital economy has attracted wide attention. To ex-plore how to improve the operational performance of China's digital firms, this paper conducts an influence mechanism model to test the nonlinear effect, heterogeneity effects, and mediation effects using a panel data of China's digital firms from 2008 to 2017. The empirical results indicate that R&D subsidies have an inverted U-shaped effect on operational performance, and these results are still valid after a series of robustness tests. In addition, we find that R&D subsidies have a heterogeneous effect on operational performance in terms of region, company size, governance structure, and executive education background. Moreover, regarding the influence mechanism, R&D subsidies improve operational performance by improving innovation efficiency. This paper proposes some policy implications to improve the operational performance of China's digital firms.

Suggested Citation

  • Qingjie Zhou & Mingyue Du & Zhenling Chen & Tianshun Miao & Guoge Yang, 2022. "Do R&D Subsidies Improve Operational Performance? New evidence from China," Prague Economic Papers, Prague University of Economics and Business, vol. 2022(5), pages 398-416.
    • Handle: RePEc:prg:jnlpep:v:2022:y:2022:i:5:id:809:p:398-416
    DOI: 10.18267/j.pep.809
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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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