Research and development fund allocation, high technology law, and firm investment choices

Anh Ngoc Quang Huynh

Economics Letters, 2025, vol. 253, issue C

Abstract: The distance to the nearest innovation centers is used as an exogenous proxy to establish a causal relationship between research and development (R&D) fund allocation and firm investment choices. Analyzing listed firms in Vietnam (2006–2022), I found that as the distance from firms to these innovation centers increases, the effect of R&D on firm performance diminishes. Additionally, greater distances to innovation centers weaken the impact of R&D on firms' investment in intangible assets. My findings highlight significant geographical constraints on firms’ innovation efforts. They suggest that further proximity to innovation centers could affect firms’ R&D efficiency and widen their disparities in economic growth and innovation-driven productivity (Croce et al., 2012; Croce et al., 2019). Finally, the effect of Vietnam’s 2009 High Technology Law on firms’ investment choices was also examined.

Keywords: Innovation; Innovation center; Firm performance; Fund; Research and development (search for similar items in EconPapers)
JEL-codes: G14 G31 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:253:y:2025:i:c:s0165176525002162

DOI: 10.1016/j.econlet.2025.112379

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