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R&D, Financial Constraints And Productivity: Evidence From The Chinese Industrial Enterprises

Author

Listed:
  • MINGLI XU

    (School of Public Administration, South China Normal University, Guangzhou 510006, China)

  • WEI YANG

    (School of Business, East China University of Science and Technology, Shanghai 200237, China)

  • LIRANG PANG

    (School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China)

  • DONGMIN KONG

    (School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China)

Abstract

Using a unique dataset from National Bureau of Statistics of China, we estimate the total factor productivity (TFP) of enterprise and explore the relationship among research and development expenditures (R&D), financial constraints and TFP. We find that: First, R&D has a significantly lagged effect on the improvement of TFP. Second, the R&D fails to improve the contemporaneous productivity and negatively impacts on contemporaneous TFP. Third, financial constraints significantly reduce the improvement effect of R&D on TFP, and this kind of marginal effect has significant difference between state-owned enterprises (SOEs) and private enterprises (Non-SOEs). This study offers important policy implications by showing that: First, firms can obtain long-term benefits from continuous R&D expenditures. Second, the government should release appropriate policies to ease financial constraints, especially for the Non-SOEs.

Suggested Citation

  • Mingli Xu & Wei Yang & Lirang Pang & Dongmin Kong, 2020. "R&D, Financial Constraints And Productivity: Evidence From The Chinese Industrial Enterprises," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(04), pages 947-967, June.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:04:n:s0217590817500126
    DOI: 10.1142/S0217590817500126
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    Cited by:

    1. Lin, Gan & Takahashi, Yoshifumi & Nomura, Hisako & Yabe, Mitsuyasu, 2022. "Policy incentives, ownership effects, and firm productivity—Evidence from China’s Agricultural Leading Firms Program," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 845-859.
    2. Bhattacharya, Mita & Okafor, Luke Emeka & Pradeep, V., 2021. "International firm activities, R&D, and productivity: Evidence from Indian manufacturing firms," Economic Modelling, Elsevier, vol. 97(C), pages 1-13.

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