R&D Returns, Spillovers and Firm Incentives: Evidence from China
Chorching Goh , Lixin Colin Xu , Wei Li
Front. Econ. China ›› 2016, Vol. 11 ›› Issue (4) : 581 -607.
R&D Returns, Spillovers and Firm Incentives: Evidence from China
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.
R&D / returns / incentives / spillover
Higher Education Press
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