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2009•The Journal of Financial ResearchRequires access

An Empirical Study of the Effect of Public R&D Subsidies on Firm R&D Expenditure:Evidence from China

LU Shansha

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Abstract

This paper analyzes the effects of public RD subsidies on innovation expenditure of Chinese listed companies.The key issue is whether public RD stimulates or simply crowds out private RD investment. Cross sectional data at the firm level are used to estimate the effect of subsidization.The empirical result shows that public funding increases firms' RD expenditure.So the hypothesis of crowding-out effects between public and private RD funding can be rejected.

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What this paper is about

This paper analyzes the effects of public RD subsidies on innovation expenditure of Chinese listed companies.The key issue is whether public RD stimulates or simply crowds out private RD investment. Cross sectional data at the firm level are used to estimate the effect of subsidization.The empirical result shows that public funding increases firms' RD expenditure.So the hypothesis of crowding-out effects between public and private RD funding can be rejected.

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OpenAlex reports 6 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This paper analyzes the effects of public RD subsidies on innovation expenditure of Chinese listed companies.The key issue is whether public RD stimulates or simply crowds out private RD investment. Cross sectional data at the firm level are used to estimate the effect of subsidization.The empirical result shows that public funding increases firms' RD expenditure.So the hypothesis of crowding-out effects between public and private RD funding can be rejected.

Key concepts: Subsidy, Crowds, Crowding out, China, Investment (military), Economics, Public expenditure, Empirical evidence

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