The Patron and the Orchestrator: Imperfect Institutions and the Dual Influence of the State on Corporate R&D Investments

Jojo Jacob and Claudio Petti

Journal of Development Studies, 2026, vol. 62, issue 6, 1043-1061

Abstract: This article examines the dual influence of the state on corporate R&D investments in China, focusing on how local-level political connections impact the national government’s capacity to orchestrate innovation through strategic financial support. Building on the developmental state theory and the literature on the subnational institutional dynamics in China, we explore the tension associated with firms’ connections with local governments and the national government’s long-term innovation objectives. Analysis of data from a national survey of private firms conducted after the 2008 financial crisis reveals that while state support generally boosts R&D investments, local political connections can undermine this effect. Importantly, we find that export orientation mitigates this adverse impact. Our study highlights how local political connections spawn an institutional logic promoting insularity and learning inertia, jeopardising the state’s role as a facilitator of collective action. It further demonstrates how export orientation can usher in an institutional logic centred on learning and innovation, counterbalancing the negative effects associated with local connections, ensuring that state support effectively drives long-term competitiveness.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2025.2571703 (text/html)
Access to full text is restricted to subscribers.

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:taf:jdevst:v:62:y:2026:i:6:p:1043-1061

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2025.2571703

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().