Prague Economic Papers 2022, 31(5):398-416

Do R&D Subsidies Improve Operational Performance? New evidence from China

Qingjie Zhou ORCID...b, Mingyue Du ORCID...a, Zhenling Chen ORCID...a, Tianshun Miao ORCID...c, Guoge Yang ORCID...d
a School of Economics, Beijing Technology and Business University, Beijing, China
b Institute of New Commercial Economy, Beijing Technology and Business University, Beijing, China
c School of Foreign Languages, Beijing Technology and Business University, Beijing, China
d School of Economics and Management, Xinjiang University, Urumqi, Xinjiang, China

The sustainable development of the digital economy has attracted wide attention. To ex-plore how to improve the operational performance of China's digital firms, this paper conducts an influence mechanism model to test the nonlinear effect, heterogeneity effects, and mediation effects using a panel data of China's digital firms from 2008 to 2017. The empirical results indicate that R&D subsidies have an inverted U-shaped effect on operational performance, and these results are still valid after a series of robustness tests. In addition, we find that R&D subsidies have a heterogeneous effect on operational performance in terms of region, company size, governance structure, and executive education background. Moreover, regarding the influence mechanism, R&D subsidies improve operational performance by improving innovation efficiency. This paper proposes some policy implications to improve the operational performance of China's digital firms.

JEL classification: D02, D04, L86

Received: February 15, 2022; Revised: May 23, 2022; Accepted: June 6, 2022; Published: December 5, 2022  Show citation

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Zhou, Q., Du, M., Chen, Z., Miao, T., & Yang, G. (2022). Do R&D Subsidies Improve Operational Performance? New evidence from China. Prague Economic Papers, 31(5), 398-416
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