EconPapers    
Economics at your fingertips  
 

The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?

Zhenji Jin (), Yue Shang () and Jian Xu ()
Additional contact information
Zhenji Jin: Department of Management, Qingdao Agricultural University, Qingdao 266109, China
Yue Shang: Department of Management, Qingdao Agricultural University, Qingdao 266109, China
Jian Xu: Department of Business Administration, Dankook University, Jukjeon-ro 152, Yongin-si, Gyeonggi-do 16809, Korea

Sustainability, 2018, vol. 10, issue 7, 1-20

Abstract: Government subsidies as a policy instrument are used to alleviate market failure in research and development (R&D) activities. We aim to understand the influence of government subsidies on enterprises’ R&D investment and performance. We are also interested in examining how the attributes of enterprise ownership act as a moderating variable for the relationship between government subsidies, R&D investment, and firm performance. We use firm-level data on China’s manufacturing listed companies from 2011 to 2015. The results show that receiving government subsidies improves private R&D investment and firm performance, and state-owned enterprises (SOEs) can obtain more subsidies than private-owned enterprises (POEs). However, the impact of government subsidies on private R&D investment is stronger in POEs than in SOEs of China. In additional analyses, we also examine this relationship by industry, region, subsidy intensity, and R&D intensity. This study has important policy implications for regulators to improve the effectiveness of government subsidies.

Keywords: government subsidy; R&D investment; firm performance; ownership; manufacturing listed company (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
https://www.mdpi.com/2071-1050/10/7/2205/pdf (application/pdf)
https://www.mdpi.com/2071-1050/10/7/2205/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:7:p:2205-:d:154916

Access Statistics for this article

Sustainability is currently edited by Prof. Dr. Marc A. Rosen

More articles in Sustainability from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().

 
Page updated 2018-10-02
Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2205-:d:154916