R&D subsidies and R&D expenditure in China: do financing constraints play intervening roles?

摘要

In response to the state of R&D and financing in China, we conducted an empirical study using unbalanced panel data of Chinese listed growth enterprises market (GEM) companies from 2010 to 2017, in order to investigate how R&D subsidies affect R&D expenditure. We find that R&D subsidies can crowd in R&D expenditure, and that financing constraints play intervening roles in the relationship between R&D subsidies and R&D expenditure. The study further implies that R&D subsidies can better ease financing constraints and better crowd in R&D expenditure of enterprises located in innovative cities. We also find that, in China, there is room for enhancing the easing effect of R&D subsidies on financing constraints. In line with our estimation results, we suggest that the Chinese Government provide more R&D subsidies, adjust its R&D subsidy strategy, develop science and technology banks, improve the country's capital market, and enact more preferential policies for R&D.