 Do China’s Special Economic Zones Increase Incentives to Invest in R&D?Katrin Hussinger and
Lorenzo Palladini ()
DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Abstract: China’s special economic zones (SEZs) have been established to foster business growth and innovation by improving the institutional context of specific sub-regional areas. We examine the effect of SEZs on the contribution of research and development (R&D) to the market value of firms located in these areas. The market value reflects investors’ expectations of future returns to R&D, providing crucial information for strategic investment decisions. Larger R&D contributions to the market value create stronger incentives for firms to invest in innovation. Empirical results suggest that the contribution of R&D to the market value increases through the SEZs program, particularly for R&D intensive firms. This suggests that regional policies, while increasing incentives to innovate, may widen the gap between less and more R&D intensive firms, potentially impacting competition and long-term growth. Keywords: Special economic zones (SEZs); China; Market value; R&D; Institutional development; Innovation incentives. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:25-10 Access Statistics for this paper More papers in DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Contact information at EDIRC. |
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