Paper Info
Title
A Story Conveyed for Emerging Economies: The Transitivity Effects of Subsidy, R&D, and Innovation Within Manufacturing Industries
Abstract
Presently, research and development (R&D) and innovation have been discussed in diverse ways. However, the nexus of subsidy was relatively unexplored in emerging economies. Furthermore, the effects of age are observed to be inconclusive. Considering 1272 selected Chinese manufacturing firms over the period 2007–2017, we employ fixed effect models to examine the effects of Subsidy on R&D and innovation and whether age was a moderating factor. Consistent with the sandwich theoretical proposition, this article found that there exists a significantly transitive relationship between government subsidy, R&D, and innovation. Whereas young firms perform better in the short-term, state-owned firms outweigh the private ones in performance. Subsequently, age alternatively moderates the R&D and innovation relationship from the perspective of subsidy. Though subsidy is a short-term determinant of R&D, it has a long-term relationship with innovation. In contrast, R&D and innovation have short-term effects based on lag computations. Overall, our findings suggest that government subsidy plays a crucial role in R&D and innovation for emerging markets. We discuss our results within the theoretical frameworks of sandwich, the economics of subsidy, and behavioral theory of R&D.
Year
DOI
Venue
2022
10.1109/TEM.2020.3036614
IEEE Transactions on Engineering Management
Keywords
DocType
Volume
Emerging markets,GMM-model,government subsidy,innovation,R&D,sandwich theory
Journal
69
Issue
ISSN
Citations 
6
0018-9391
0
PageRank 
References 
Authors
0.34
1
4
Name
Order
Citations
PageRank
Bright Nana Kwame Ahia100.34
Na Song200.34
Solomon Abugri Anafo300.34
Elijah Asante Boakye400.34