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Political favoritism towards resource allocation: Evidence of grants by natural science foundation in China

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  • Liu, Zihua
  • Zhou, Sili

Abstract

We study the effect of political power on resource allocation for knowledge production dictated by central planning in a non-market system. Our empirical results suggest that, compared to non-connected scholars, political connected (PC) scholars have 15.7% more allocation granted by the national Natural Science Foundation of China (NSFC). Variations in grant allocation is related to weaker institutional environments, less reputable universities, and hard-to-value project. Additional analysis suggests that access to the NSFC fund not only benefits individual PC scholars in terms of their research quality, but also brings more high-impact publications for their affiliated institution.

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  • Liu, Zihua & Zhou, Sili, 2022. "Political favoritism towards resource allocation: Evidence of grants by natural science foundation in China," Emerging Markets Review, Elsevier, vol. 51(PA).
    • Handle: RePEc:eee:ememar:v:51:y:2022:i:pa:s1566014121000741
    DOI: 10.1016/j.ememar.2021.100866
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    More about this item

    Keywords

    Political power; Resource allocation; Political favoritism; Knowledge production; Institutional environment;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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