China's R&D Explosion – Analyzing Productivity Effects Across Ownership Types and Over Time

61 Pages Posted: 26 Feb 2015  

Philipp Boeing

Centre for European Economic Research (ZEW); Peking University, China Center for Economic Research

Elisabeth Mueller

German Graduate School of Management and Law

Philipp G. Sandner

Frankfurt School of Finance & Management

Date Written: January 12, 2015

Abstract

In the past years Chinese firms increased their spending on R&D substantially and worked on achieving a higher quality level of R&D. We analyze whether different R&D activities show a positive influence on total factor productivity (TFP) for firms of different ownership types and across two time periods. Our panel dataset with annual information allows us to study listed firms over the two time periods 2001-2006 and 2007-2011. Privately owned enterprises (POEs) not only obtain higher returns from own R&D than majority and minority state-owned enterprises (SOEs), they are also able to increase their leading position. Overall strong increases in the size of patent stocks are related to a decreasingly positive or even vanishing influence on TFP. POEs not only produce R&D of the highest quality but are also the only ownership type profiting from higher quality. Up to now research collaborations allow almost no benefit with the only exception stemming from domestic collaborations with individuals. Our comprehensive analysis depicts strengths but also weaknesses of the corporate sector in China. We derive implications for the further development of economic policies.

Keywords: productivity, R&D, China, ownership type, patents

JEL Classification: O32, O33

Suggested Citation

Boeing, Philipp and Mueller, Elisabeth and Sandner, Philipp G., China's R&D Explosion – Analyzing Productivity Effects Across Ownership Types and Over Time (January 12, 2015). ZEW - Centre for European Economic Research Discussion Paper No. 15-006. Available at SSRN: https://ssrn.com/abstract=2570736 or http://dx.doi.org/10.2139/ssrn.2570736

Philipp Boeing (Contact Author)

Centre for European Economic Research (ZEW) ( email )

L 1, 7
Mannheim, Baden-Württemberg 68161
Germany
+49 (0)621 1235-377 (Phone)

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=pbo

Peking University, China Center for Economic Research ( email )

Yiheyuan Road 5
Beijing, Beijing 100871
China

HOME PAGE: http://www.nsd.pku.edu.cn

Elisabeth Mueller

German Graduate School of Management and Law ( email )

Bildungscampus 2
Heilbronn, 74076
Germany

Philipp Sandner

Frankfurt School of Finance & Management ( email )

Sonnemannstraße 9-11
Frankfurt am Main, 60314
Germany

HOME PAGE: http://www.philipp-sandner.de

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