Property Rights Protection and Corporate R&D: Evidence from China

43 Pages Posted: 9 May 2009

See all articles by Chen Lin

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Ping Lin

Lingnan University - Department of Economics

Frank M. Song

The University of Hong Kong - School of Economics and Finance

Date Written: May 9, 2009

Abstract

Following the recent literature on institutions and economic growth, we examine the effects of property rights protection on corporate R&D. Using a unique 2003 World Bank survey of over 2400 firms in 18 Chinese cities, we obtain the following findings: (1) property rights protection is positively and significantly related to corporate R&D activity (for both process and product R&D); (2) government services and helping hand are conducive to corporate R&D, while informal payments to government officials are not; and (3) government ownership of firms and direct appointment of CEOs are negatively associated with corporate R&D activities. We also find that corporate R&D is positively related to firm size, and access to finance, but negatively related to product market competition and firm age.

Keywords: Property Rights Protection, Government Grabbing Hand, Corporate R&D

JEL Classification: O3, O12, P20

Suggested Citation

Lin, Chen and Lin, Ping and Song, Frank M., Property Rights Protection and Corporate R&D: Evidence from China (May 9, 2009). Journal of Development Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1401753

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Ping Lin (Contact Author)

Lingnan University - Department of Economics ( email )

135 Xingang Xi Road
Tuen Mun
Guangzhou, Guangzhou 510275
China
(852)2616 7203 (Phone)
(852)2891 7940 (Fax)

Frank M. Song

The University of Hong Kong - School of Economics and Finance ( email )

8th Floor Kennedy Town Centre
23 Belcher's Street
Kennedy Town
Hong Kong

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