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Quantile heterogeneous impact of R&D on firm growth in Chinese manufacture: how ownership, firm size and sectors matter?

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  • Huiming Zhu
  • Zhongqingyang Zhang
  • Yuan Huang
  • Weifang Mao

Abstract

This paper explores the heterogeneous impact of R&D on firm growth in Chinese manufacturing industry during the periods 2012–2017. We divide the full sample into sub-samples according to different ownership, firm size and sectors, respectively, which help comprehensive observe the impact of R&D on firm growth. The results indicate that R&D has a significant positive impact on firm growth, and that R&D of private enterprises has a greater impact on firm growth than that of state-owned enterprises across all quantiles. Moreover, we find the R&D effectiveness of non-small and medium-sized enterprises is significantly greater than that of SMEs. Additionally, persuasive evidence proves the existence of an inverted-U relationship between R&D and firm growth, except for higher-growth state-owned SMEs. The results also indicate that R&D plays a more significantly positive role in high-tech industries. Our finding suggests that policymakers should encourage R&D investment in manufacturing industry to promote firm growth. But policymaker must classify firms, observe R&D intensity turning points of firms with different types, formulate meticulous R&D strategies, and maximize R&D utility.

Suggested Citation

  • Huiming Zhu & Zhongqingyang Zhang & Yuan Huang & Weifang Mao, 2021. "Quantile heterogeneous impact of R&D on firm growth in Chinese manufacture: how ownership, firm size and sectors matter?," Applied Economics, Taylor & Francis Journals, vol. 53(28), pages 3267-3287, June.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:28:p:3267-3287
    DOI: 10.1080/00036846.2021.1873235
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    Cited by:

    1. Besstremyannaya, Galina & Dasher, Richard & Golovan, Sergei, 2022. "Quantifying heterogeneity in the relationship between R&D intensity and growth at innovative Japanese firms: A quantile regression approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 67, pages 27-45.
    2. Andrea Fracasso & Kun Jiang, 2022. "The performance of private companies in China before and during the global financial crisis: firms’ characteristics and entrepreneurs’ attributes," Economic Change and Restructuring, Springer, vol. 55(2), pages 803-836, May.
    3. Aysa Ipek Erdogan, 2023. "Drivers of SME Growth: Quantile Regression Evidence From Developing Countries," SAGE Open, , vol. 13(1), pages 21582440231, March.
    4. Zhang, Zhongqingyang & Zhu, Huiming & Zhou, Zhongbao & Zou, Kai, 2022. "How does innovation matter for sustainable performance? Evidence from small and medium-sized enterprises," Journal of Business Research, Elsevier, vol. 153(C), pages 251-265.
    5. Zhang, Zhongqingyang & Mao, Ruixiang & Zhou, Zhongbao & Zeng, Zhijian, 2023. "How does digital finance affect green innovation? City-level evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).

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