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How Funding Structure Affects Efficiency Of R&D Investment By Large- And Medium-Sized Industrial Firms In China? Evidence From Province-Level Panel Data

Author

Listed:
  • YIXIAO ZHOU

    (School of Economics and Finance, Curtin University, Kent St, Bentley WA6102, Western Australia, Australia)

  • RUNYANG ZHANG

    (School of Economics and Finance, Curtin University, Kent St, Bentley WA6102, Western Australia, Australia)

  • LIGANG SONG

    () (#x2020;Crawford School of Public Policy, The Australian National University, JG Crawford Building, 132, Lennox Crossing, Acton ACT 0200, Australia)

Abstract

This study explores the efficiencies of firm’s R&D investment depending on the degree of reliance on government funding relative to firms’ private funding. Stochastic frontier analysis is applied on a sample of 30 provinces with data on R&D inputs and innovation outputs by all large- and medium-sized industrial firms in these provinces from 2000 to 2013. It is found that R&D investment financed by firms’ private funding is more efficient than that by government funding in generating new products, whereas R&D investment financed by government funding is more efficient than that by firms’ private funding in producing new patents.

Suggested Citation

  • Yixiao Zhou & Runyang Zhang & Ligang Song, 2019. "How Funding Structure Affects Efficiency Of R&D Investment By Large- And Medium-Sized Industrial Firms In China? Evidence From Province-Level Panel Data," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 921-938, September.
  • Handle: RePEc:wsi:serxxx:v:64:y:2019:i:04:n:s0217590817450084
    DOI: 10.1142/S0217590817450084
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    References listed on IDEAS

    as
    1. Yixiao Zhou & Ligang Song, 2016. "International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(1), pages 63-84, January.
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    7. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
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