Peer effects on corporate R&D investment policies: A spatial panel model approach

Junbao Li, Zhanzhong Shi, Chengying He and Chengshuang Lv

Journal of Business Research, 2023, vol. 158, issue C

Abstract: Identifying peer effects has important policy implications because endogenous peer effects can amplify policy effects. Using a spatial panel model with network-structure peer groups and data on listed manufacturing firms in China, we investigate whether a firm’s R&D expenditure affects its peers’ R&D policies. Our results show: (1) peer firms’ R&D expenditures play an essential role in determining corporate R&D investment policies; (2) competition and information incentives are the two main underlying channels; and (3) R&D subsidies can indirectly increase a firm’s R&D via the endogenous effect. Using a novel identification strategy, this study provides additional empirical evidence of peer effects on corporate policies. The findings contribute to our understanding of the impacts of R&D subsidies and indicate that the overall policy effect can be leveraged by considering firms’ networks.

Keywords: R&D peer effects; Reflection problem; Spatial panel model; R&D subsidies (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:158:y:2023:i:c:s0148296323000255

DOI: 10.1016/j.jbusres.2023.113667

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