 A cost-benefit analysis of R&D and patents: Firm-level evidence from ChinaZhiyuan Chen, Jie Zhang and Yuan Zi European Economic Review, 2021, vol. 133, issue C Abstract: We extend the empirical framework by Peters et al. (2017) to include both R&D and patents in the productivity evolution. We provide a decomposition of the benefits of R&D into the patent and non-patent components, and a novel measure of the patent value conditioning on the firm’s R&D investment. Using a sample of Chinese high-tech manufacturing firms, we find that (1) 47.8% to 67% of the benefits of R&D investment comes from non-patent R&D activities; (2) On average an invention (a utility model) patent causes around 0.76 (0.66) percent increase in the firm value; (3) The start-up costs of R&D are around ten times as large as the maintenance R&D costs. The counterfactual analysis shows that the lump-sum subsidy is more effective than the proportional subsidy in increasing the expected firm value and innovation probability. R&D continuers respond more actively than the R&D starters to the R&D subsidy. Keywords: Dynamic R&D investment; Patent; Productivity; R&D subsidy (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:eecrev:v:133:y:2021:i:c:s0014292120302634 DOI: 10.1016/j.euroecorev.2020.103633 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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