Corporate key labs: Breakthrough or white elephant?

Qifeng Zhao, Qianfeng Luo, Xiaofeng Zhao and Yihua Yu ()

China Economic Review, 2023, vol. 79, issue C

Abstract: Based on manually collected data from Chinese listed firms' key laboratories at the state and provincial levels, this study shows that key laboratories improve firms' innovation output. Corporations with key laboratories at the state or provincial level produce more patents and citations than their counterparts. A series of endogenous treatment effects, including the Heckman two-step sample selection model, instrumental variable estimation, policy shock analysis, and propensity score matching, indicate that this study's main conclusion is robust and consistent. We also observe that key laboratories' beneficial impact on innovation output becomes more prominent for firms belonging to high-tech industries, those led by an inventor or scientist CEO, and those located in cities that enforce the protection of intellectual property. Further, key laboratories foster innovation mainly by developing scientific research capacity, increasing human capital, and improving R&D subsidies. Our findings demonstrate that key laboratories can benefit firms, their stakeholders, and the public in an emerging market such as China.

Keywords: Corporate key laboratory; Innovation; Corporate science; Human capital; R&D subsidy (search for similar items in EconPapers)
JEL-codes: D22 G34 M54 O31 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:79:y:2023:i:c:s1043951x23000391

DOI: 10.1016/j.chieco.2023.101954

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