Purpose
The purpose of this paper studies the transformation effect of research and development (R&D) subsidies on firm performance in emerging economies from the perspective of capital and product markets. It also studies the mechanisms behind R&D subsidies’ transformation effect.
Design/methodology/approach
This study mainly explores the transformation effect of government R&D subsidies on corporate performance and its non-linear characteristics using Chinese A-share listed companies’ data from 2008 to 2016. The authors use the instrumental variable method to reduce endogenous problems and conduct a series of robustness tests to support the conclusions. The mechanisms of the transformation effect are explored via mediation effect models. The impact of firm heterogeneities on the transformation effect is also addressed.
Findings
Results indicate that R&D subsidies promote firm performance and experience obvious transformation effects only within a “moderate interval.” R&D subsidies play a vital role in enhancing firm performance mainly via two mechanisms, namely, signal financing and innovation incentives. Further, the transformation effect is much greater in non-state-owned, young and large enterprises.
Originality/value
This paper contributes to understanding how R&D subsidies affect corporate performance from the perspective of capital and product markets by applying the linear and non-linear techniques that can clarify the relationship between the selected variables under study. The findings of this study might be helpful to identify the right directions for the government to implement and promote the R&D subsidy policies more effectively.
This paper examines the quantile cointegration relation between human development, energy production, and economic growth by incorporating corruption into the model for Pakistan through Quantile Autoregressive Distributed Lag (QARDL) model covering the period from 1965 to 2016. The research findings indicate that the association is quantile dependent which provides some exciting results. The Wald test is applied that rejects the null hypothesis and confirms the short- and long-run relationship between the variables. The changes in human development and economic growth are responsible for past and current changes in energy production and corruption that is confirmed through the Error Correction Model (ECM). This paper provides some interesting findings that energy production is contributing positively to human development. Further, energy production contributes negatively to economic growth, while corruption contributes positively to economic growth. These findings will help to make policy measures such as environmental regulation to improve energy efficiency and anti-corruption policies which will improve income level and economic growth of Pakistan economy.
The UNFCC on climate change specifies that all nations must follow the rule of 'common' with differentiation regarding their responsibilities for the protection of the global environmental system. Recently, the formulation and stability of the IEA have been increased in the literature by applying the concept of game theory to make the climate agreements successful at the national and the international level. This study provides a novel evolutionary game theoretic model of self-enforcing IEA to overcome the free rider problem. The fundamental difference between our paper and existing literature is that we examine enforcement within a model as IEA has a governing authority while the typical model of enforcement involves a government enforcing a rule that it has imposed. For this purpose, we assign countries into different grades according to their pollution levels, consider a combination of rewards and penalties, use replicator dynamics to derive the conditions for the population steady state, and examine how the proposed regulatory mechanism fares in this steady state. This framework enables us to avoid the free rider and renegotiation problems as well as the rationality assumption. We establish the condition for evolutionary stability. The global environmental problem is managed effectively as a reward-punishment scheme and the monitoring frequency of IEA fulfills this condition. Our results provide an allocation principal with stable conditions under which countries get more benefits by monitoring the IEA and stability of the grand coalition holds.
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