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Indexed by:期刊论文

Date of Publication:2015-01-01

Journal:TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE

Included Journals:EI、SSCI、Scopus

Volume:90

Issue:PB

Page Number:410-419

ISSN No.:0040-1625

Key Words:Public subsidies; R&D investment; Generalized propensity score

Abstract:This paper aims to investigate how the effect of public subsidies on corporate R&D investment varies with different levels of public subsidies. Based on the generalized propensity score methodology, we estimate a dose-response function, using a large sample of Chinese manufacturing firms. Our results suggest public subsidies follow an S-shaped relationship and inverted-U correlation with the firm's total R&D and private R&D investment, respectively. There is a saturation point beyond which a further increase in public subsidies does not yield an increase of firm's total R&D investment. A minimum threshold value of public subsidies is required to induce the firm's private R&D spending. There are also critical values beyond which a further increase in public subsidies would partially or completely crowd out a firm's private R&D investment. Our conclusion implies the existence of an optimal interval of subsidy, and thus could help to improve the efficiency of public subsidies. (C) 2014 Elsevier Inc. All rights reserved,