Chorching Goh,Lixin Colin Xu,Wei Li
Author information
a World Bank, Washington DC 20433, USA
b World Bank, Washington DC 20433, USA
c Cheung Kong Graduate School of Business, Beijing 100738, China
E-mail: CGOH@worldbank.org (Chorching Goh), lxu1@worldbank.org (Lixin Colin Xu), WLI@ckgsb.edu.cn (Wei Li)
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.
Chorching Goh, Lixin Colin Xu, Wei Li. R&D Returns, Spillovers and Firm Incentives: Evidence from China. Front. Econ. China, 2016, 11(4): 581‒607 https://doi.org/10.3868/s060-005-016-0030-9
