THE IMPACTS OF GOVERNMENT R&D EXPENDITURE ON INNOVATION IN CHINESE PROVINCES: WHAT’S THE ROLE OF CORRUPTION

Abstract

This study aims to investigate the moderating role of corruption on the effect of government R&D expenditure on enterprise innovation in China, using the annually data over the period 2002-2013 in a panel of 30 provinces. A dynamic panel system GMM model was used to explore the relationship among government R&D expenditure, corruption, and innovation. Our finding shows that though government R&D expenditure has no significant effects on patent applications, it does exhibit significantly positive effects on patents granted. However, when considering official corruption, the interaction term of government R&D expenditure and corruption has a statistically significantly positive effect on patent applications and patents granted, with corruption presenting significantly positive effects on the ratio of the number of patents granted to patent applications. It demonstrates that corruption is still a shortcut for overcoming red tapes and administrative intervention, especially in an economy in transition with lower institution quality and anti-corruption.

Optimum government size and economic growth in case of Indian states: Evidence from panel threshold model

“…Thus, the significance of the question of the ideal or optimum government size which maximizes the economic growth has emerged an important issue in the past (Sheehey, 1993;Hsieh and Lai, 1994;Christie, 2014;Altunc and Aydin 2013;Asimakopoulos and Karavias, 2016;Hajamini and Falahi, 2018). Also, a bunch of literature emphasizes on expenditure, economic growth, sustainability of fiscal policy, and global financial crises (for example, Mochtar, 2004;Maipita et al, 2010;Silalahi and Chawwa, 2011;Simorangkir, and Adamanti, 2010;Surjaningsih et al, 2012;Kuncoro, 2011;Raz et al, 2012;Febiyansah, 2017;Juanda, 2018;Zhou et al, 2019).…”

Collaborative innovation efficiency: From within cities to between cities—Empirical analysis based on innovative cities in China

“…At the meso level, economic development (Chang & Chen, 2004; Gao et al., 2017; Sweet & Maggio, 2015), scale agglomeration (Andersson et al., 2009; Anokhin & Wincent, 2012; Papageorgiadis & Sharma, 2016), education (Bartel & Lichtenberg, 1987; Baumol, 2005; Chi & Qian, 2010), and institutional factors (Lee & Law, 2017; Potrafke, 2010; Wang et al., 2019) are areas of concern. In addition, some studies have focused on the impact of corruption (Blackburn & Forgues‐Puccio, 2009; Sena et al., 2018; Wen et al., 2018), bureaucracy (Bronzini & Piselli, 2016; Zhou et al., 2019), and foresight (Aguirre‐Bastos & Weber, 2018; Da Costa et al., 2008; Havas et al., 2010) on the level of innovation systems. However, most of the research on these influencing factors of innovation systems consider the internal indicators of their own systems, but seldom consider the interaction between different innovation systems.…”

Do government expenditures and institutions drive growth? Evidence from developed and developing economies

“…More recent empirical studies have focussed on the size of government expenditure as one of the measures of inclusive growth (Bergh and Henrekson, 2011; Asimakopoulos and Karavias, 2016; Whajah et al , 2019; Zhou et al , 2019), which not only accounts for an increase in GDP but also looks at the welfare of individuals and societal well-being as an attempt to achieve United Nation’s sustainable development goals. Ogbu (2012) suggested a good macroeconomic policy formulation such as directing industrial policies targeted at improving the manufacturing and agricultural sector and investment in infrastructure, coupled with government expenditures warrant inclusive growth.…”