Institutional Affiliation: Xiamen University
NBER Working Papers and Publications
|September 2018||Corruption, Government Subsidies, and Innovation: Evidence from China|
with Lily Fang, Josh Lerner, Qi Zhang: w25098
Governments are important financiers of private sector innovation. While these public funds can ease capital constraints and information asymmetries, they can also introduce political distortions. We empirically explore these issues for China, where a quarter of firms’ R&D expenditures come from government subsidies. Using a difference-in-differences approach, we find that the anticorruption campaign that began in 2012 and the departures of local government officials responsible for innovation programs strengthened the relationship between firms’ historical innovative efficiency and subsequent subsidy awards and depressed the influence of their corruption-related expenditures. We also examine the impact of these changes: subsidies became significantly positively associated with future inno...
|September 2016||Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China|
with Lily Fang, Josh Lerner: w22685
Using a difference-in-difference approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms’ incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs.
Published: Lily H. Fang & Josh Lerner & Chaopeng Wu, 2017. "Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China," The Review of Financial Studies, vol 30(7), pages 2446-2477.