TITLE:
Does the Crowd-Out Effect of R&D Subsidies Exist in the Pharmaceutical Industry? Evidence from Chinese Companies
AUTHORS:
Kejin Ni
KEYWORDS:
R&D Subsidies, Crowd-Out Effect, Pharmaceutical Industry, Threshold Regression
JOURNAL NAME:
Modern Economy,
Vol.11 No.3,
March
13,
2020
ABSTRACT: Dissenting from existing multi-industries work, this
paper particularly takes the pharmaceutical entities in the Chinese industrial
enterprise database as a sample and uses the threshold regression to examine
the impact of government R&D subsidies on private R&D investment,
patent quantity and new product sales. We find that government R&D
subsidies can effectively crowd in private investment. However, due to the crowd-out threshold is
too high, the crowd-out effect does not actually exist in the pharmaceutical
industry. A similar story happens to new product sales; but for the number of
patents, there is only promoting effect.