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Do R&D subsidies promote or inhibit firm R&D collaboration? An empirical analysis on the role of risk tolerance in China

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  • Liu, Duan
  • Zhang, Tingfang
  • Jiang, Yuntian
  • Wan, Hong

Abstract

Previous studies on behavioral additionality theory suggest that government R&D subsidies can positively influence R&D collaboration by enhancing firms' learning capabilities. However, few studies address the potential impact of R&D subsidies on firms' risk tolerance for innovation uncertainty. This study examines how government R&D subsidies influence R&D collaboration, using a sample of Chinese firms listed on the Growth Enterprises Market between 2009 and 2020. Our findings reveal a negative behavioral additionality of R&D subsidies on collaboration: subsidies increase firms' risk tolerance for innovation uncertainty, motivating them to pursue independent innovations and, in turn, reducing their engagement in R&D collaboration. Heterogeneity analysis further shows that this inhibitory effect of R&D subsidies is more pronounced in firms with lower financial constraints, in more competitive industries, and in non-state-owned enterprises.

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  • Liu, Duan & Zhang, Tingfang & Jiang, Yuntian & Wan, Hong, 2025. "Do R&D subsidies promote or inhibit firm R&D collaboration? An empirical analysis on the role of risk tolerance in China," Global Finance Journal, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:glofin:v:64:y:2025:i:c:s104402832500002x
    DOI: 10.1016/j.gfj.2025.101075
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