Political favoritism towards resource allocation: Evidence of grants by natural science foundation in China

Zihua Liu and Sili Zhou

Emerging Markets Review, 2022, vol. 51, issue PA

Abstract: We study the effect of political power on resource allocation for knowledge production dictated by central planning in a non-market system. Our empirical results suggest that, compared to non-connected scholars, political connected (PC) scholars have 15.7% more allocation granted by the national Natural Science Foundation of China (NSFC). Variations in grant allocation is related to weaker institutional environments, less reputable universities, and hard-to-value project. Additional analysis suggests that access to the NSFC fund not only benefits individual PC scholars in terms of their research quality, but also brings more high-impact publications for their affiliated institution.

Keywords: Political power; Resource allocation; Political favoritism; Knowledge production; Institutional environment (search for similar items in EconPapers)
JEL-codes: O15 O34 P48 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:51:y:2022:i:pa:s1566014121000741

DOI: 10.1016/j.ememar.2021.100866

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