 R&D expenditure adjustments and firm’s patent-based efficiency: Evidence from ChinaXue Mei Zhou and Bin Liu Economic Analysis and Policy, 2025, vol. 87, issue C, 333-350 Abstract: This study investigates how dynamic adjustments in R&D expenditures affect patent output efficiency among Chinese firms, emphasizing the role of financing constraints. Using difference-in-differences (DID), triple-differences (DDD), and instrumental variable methods, we analyze data from China’s 2015 R&D subsidy policy as a quasi-natural experiment. Results reveal that faster R&D expenditure adjustments correlate with reduced invention patents, highlighting the role of financing constraints in disrupting R&D efficiency. Government subsidies mitigate these constraints, boosting patent output, particularly for firms with historically high adjustment rates. Notably, low-complexity patents (design/utility models) remain unaffected. The study contributes by identifying R&D adjustment speed as a critical efficiency determinant and demonstrating robust methodologies for causal inference. Findings inform policies on R&D resource allocation and subsidy design to optimize innovation under financial constraints. Keywords: R&D expenditure adjustments; R&D efficiency; Financing constraints (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:eee:ecanpo:v:87:y:2025:i:c:p:333-350 DOI: 10.1016/j.eap.2025.05.041 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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