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Export, subsidy and innovation: China’s state-owned enterprises versus privately-owned enterprises

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  • Laijun Luo
  • Yang Yang
  • Yuze Luo
  • Chang Liu

Abstract

In this study, we advance the literature on export and government subsidy by examining their effects in the context of China, a fast-growing emerging economy, and comparing the effects across ownership of enterprises. We examine the relationship among export, government support and firms’ innovation capability, and how these relationships differ between state-owned and private owned enterprises, by using a large data sample of Chinese firms (2003–2007). First, we find that there exists an inverted U-shaped relationship between export and innovation in state-owned enterprises, but not in private owned enterprises. Second, there is a positive effect of government subsidy on firms’ innovation capability. Finally, from the sub-sample analyses, we identify differences in the impact of government support between SOEs and POEs. This study will inspire future research into these issues in the disciplines of marketing, management and international business.

Suggested Citation

  • Laijun Luo & Yang Yang & Yuze Luo & Chang Liu, 2016. "Export, subsidy and innovation: China’s state-owned enterprises versus privately-owned enterprises," Economic and Political Studies, Taylor & Francis Journals, vol. 4(2), pages 137-155, April.
  • Handle: RePEc:taf:repsxx:v:4:y:2016:i:2:p:137-155
    DOI: 10.1080/20954816.2016.1180766
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    Cited by:

    1. Yee Yee Sein & Viktor Prokop, 2021. "Mediating Role of Firm R&D in Creating Product and Process Innovation: Empirical Evidence from Norway," Economies, MDPI, vol. 9(2), pages 1-16, April.
    2. Wang, Zhongcheng & Li, Xinyue & Xue, Xinhong & Liu, Yahuan, 2022. "More government subsidies, more green innovation? The evidence from Chinese new energy vehicle enterprises," Renewable Energy, Elsevier, vol. 197(C), pages 11-21.
    3. Zhenji Jin & Yue Shang & Jian Xu, 2018. "The Impact of Government Subsidies on Private R&D and Firm Performance: Does Ownership Matter in China’s Manufacturing Industry?," Sustainability, MDPI, vol. 10(7), pages 1-20, June.
    4. Rikap, Cecilia, 2022. "Becoming an intellectual monopoly by relying on the national innovation system: the State Grid Corporation of China's experience," Research Policy, Elsevier, vol. 51(4).
    5. Yu, Feifei & Wang, Liting & Li, Xiaotong, 2020. "The effects of government subsidies on new energy vehicle enterprises: The moderating role of intelligent transformation," Energy Policy, Elsevier, vol. 141(C).
    6. Simona Gentile-Lüdecke & Rui Torres de Oliveira & Justin Paul, 2020. "Does organizational structure facilitate inbound and outbound open innovation in SMEs?," Small Business Economics, Springer, vol. 55(4), pages 1091-1112, December.

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