How do entrepreneurs’ characteristics affect R&D expenditure? Evidence from small and micro Chinese firms

Lan Zhang, Jiancheng Wang and Yao Xiao

Applied Economics, 2022, vol. 54, issue 53, 6098-6107

Abstract: Drawing on data from more than 3000 small and microChinese firms, this paper studies the determinants of R&D spending, focusing on the entrepreneurs’ attributes. The characteristics of an entrepreneur can be crucially relevant in determining investment by small and micro firms in a risky undertaking like R&D. Results show that male owners and college graduates are more likely to invest in R&D, while older owners are less likely to do so. Previous work and entrepreneurial experience contributed to the propensity to invest in R&D but work experience in the government do not matter. Regarding ownership attributes, individual owners are less likely to invest in R&D, whereas the effect of private ownership is statistically insignificant. Other than that, we find that higher firm sales spur R&D spending, with the influences of leverage and return on assets being statistically insignificant.

Date: 2022
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DOI: 10.1080/00036846.2022.2056572

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