R&D Capital Allocation Efficiency of China with Industry Divergence

Because of the scarcity of RD capital,to study RD capital allocation efficiency is significant before increasing the RD capital investment.In this paper,based on Wurgler(2000) model,we build a dynamic model and a panel data models to study RD capital allocation efficiency during 2004-2009 of 37 industrial.The study found: RD capital allocation is efficient(0.109),but at a low level;the spontaneous level of RD capital investment is low and exists industry divergence.To improve RD capital allocation efficiency,on the one hand we should give full play to the basic role of market mechanism;the other hand we should play an active role in the government's macro-control,but also Continuously enhance the business motivation to improve the spontaneous level of RD capital investment.