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Frontiers of Economics in China

Front. Econ. China    2016, Vol. 11 Issue (4) : 581-607     DOI: 10.3868/s060-005-016-0030-9
Orginal Article |
R&D Returns, Spillovers and Firm Incentives: Evidence from China
Chorching Goh1(),Lixin Colin Xu2(),Wei Li3()
1. World Bank, Washington DC 20433, USA
2. World Bank, Washington DC 20433, USA
3. Cheung Kong Graduate School of Business, Beijing 100738, China
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Using a new data set of 12,000 firms in China, this paper estimates the returns to R&D investment and its spillover effects, and investigates how the returns to R&D depend on firm incentives. For the firms in the sample, the results show that on average firm output increases around 0.4 yuan for each additional 1 yuan spent on R&D in the previous year, and there is high R&D return regardless of whether the endogeneity of R&D intensity is dealt with or not. Interestingly, the marginal return to R&D is significantly higher in firms whose CEOs were not appointed by the government, and lower when CEO pay is directly related to annual performance. The return to R&D is higher in relatively poor regions and for firms with worse access to finance. There are also non-trivial R&D spillover effects.

Keywords R&D      returns      incentives      spillover     
Issue Date: 20 January 2017
 Cite this article:   
Chorching Goh,Lixin Colin Xu,Wei Li. R&D Returns, Spillovers and Firm Incentives: Evidence from China[J]. Front. Econ. China, 2016, 11(4): 581-607.
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Chorching Goh
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