TY - JOUR
T1 - Can Public R&D Subsidy Facilitate Firms’ Exploratory Innovation? The Heterogeneous Effects between Central and Local Subsidy Programs
AU - Gao, Yuchen
AU - Hu, Yimei
AU - Liu, Xielin
AU - Zhang, Huanren
PY - 2021
Y1 - 2021
N2 - Public R&D subsidy is a commonly adopted policy instrument to promote firms’ exploratory innovation that encourages novel knowledge learning. Under the multi-level institutional settings such as China, however, it is unclear in current literature as to whether central and local-level governmental R&D subsidy programs exert heterogeneous influences on recipient firms’ exploratory innovation. By employing an exclusive panel data of manufacturing firms in Jiangsu Province, this study investigates the heterogeneous effects of central and local R&D subsidies on firms’ exploratory innovation. Considering that regional innovation contexts may influence the learning and innovation of subsidy recipients, we further test the interaction effects of specialized industrial agglomeration and R&D subsidies. We find that R&D subsidies in general do promote firms’ exploratory innovation, and the local R&D subsidy exhibits a more salient effect. In addition, the positive effect of subsidies is stronger for the recipients in a highly specialized industrial agglomeration. This study contributes to R&D subsidy literature and extends our knowledge on the different roles of central and local governments in firms’ learning behaviors and technological upgrading.
AB - Public R&D subsidy is a commonly adopted policy instrument to promote firms’ exploratory innovation that encourages novel knowledge learning. Under the multi-level institutional settings such as China, however, it is unclear in current literature as to whether central and local-level governmental R&D subsidy programs exert heterogeneous influences on recipient firms’ exploratory innovation. By employing an exclusive panel data of manufacturing firms in Jiangsu Province, this study investigates the heterogeneous effects of central and local R&D subsidies on firms’ exploratory innovation. Considering that regional innovation contexts may influence the learning and innovation of subsidy recipients, we further test the interaction effects of specialized industrial agglomeration and R&D subsidies. We find that R&D subsidies in general do promote firms’ exploratory innovation, and the local R&D subsidy exhibits a more salient effect. In addition, the positive effect of subsidies is stronger for the recipients in a highly specialized industrial agglomeration. This study contributes to R&D subsidy literature and extends our knowledge on the different roles of central and local governments in firms’ learning behaviors and technological upgrading.
KW - central and local governments
KW - exploratory innovation
KW - industrial agglomeration
KW - public R&D subsidy
UR - http://www.scopus.com/inward/record.url?scp=85101066073&partnerID=8YFLogxK
U2 - 10.1016/j.respol.2021.104221
DO - 10.1016/j.respol.2021.104221
M3 - Journal article
SN - 0048-7333
VL - 50
JO - Research Policy
JF - Research Policy
IS - 4
M1 - 104221
ER -