The Effect of China’s Public R & D Policy on R & D Expenditure of Enterprises

Whether public R & D expenditures are complementary or crowding out of R & D expenditures in the enterprise, there is no consensus in the academic community. This paper constructs a dynamic panel data model, uses the system GMM to estimate, and examines the impact of Chinese government R & D funding on corporate R & D expenditures at the macro level, concluded as follow: When endogenous issues are not considered, the estimated result is that government R & D funding will increase R & D expenditures for enterprises, and considering endogenous issues, government R & D funding will squeeze out R & D expenditures. The government’s R & D funding for scientific research institutions has had a significant negative impact, and the government’s R & D funding for institutions of higher learning will boost the R & D investment of companies. According to the current distribution of government R & D funding, the impact of government R & D funding on corporate R & D expenditure is 0.3276; the impact of government R & D funding on self-raised R & D funds is -0.038. It can be seen that according to the current distribution of government R & D funding, the effect of government R & D funding is crowding out.