Inner Incentive for R&D——Analysis Based on R&D Efficiency

Based on the concept of RD efficiency,it established RD model to explain the RD decision of enterprise: Given the diminishing of RD returns to scale,the interaction between RD efficiency and RD investment is positive. Empirical tests on panel data from 37 Chinese industries in the period of 2003 to 2010 further validated the conclusion. In addition,the results also proved that productivity,market competition and profitability can significantly affect RD investment scale. Further analysis reveals that in the sub-sample of high capital intensity or lower market competition,the elasticity of RD investment on capital intensity is negative,on the other hand when the capital intensity is low,the elasticity is positive; in addition,in competitive market,competition is conducive to innovation,whereas in the monopoly market,monopoly is more conducive to innovation.