The crowding-out effect and innovation efficiency of government R&D subsidy under institutional constraints

Abstract

Abstract: The crowding-out effect possibly influence the effectiveness of government financial support on firms' R&D activity. So far, the related research lack theoretical explanation and quantitative evidence. This paper applies the two-stage econometric model on China's provincial data within 2000-2010. Firstly, based on the SFA model, it finds the crowding-out effect of government R&D subsidy exists because of institutional constraints, and also shows significantly ladder-shaped differences among regions. Secondly, it decomposes innovation efficiency based on the Malmquist DEA approach, and finds out that because of the resource allocation mechanism problem between capital and personnel in R&D, institutional constraints hamper scale efficiency rise via crowing-out effects, andthe restraining result could be weakened by improving it.

Key words: institutional constraint, crowding-out effect, R&D, innovation efficiency

CLC Number:

F270.3

Li Yong, Wang Yanping, Ma Yu. The crowding-out effect and innovation efficiency of government R&D subsidy under institutional constraints[J]. Science Research Management, 2015, 36(10): 58-65.

References

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